You buy property to make money, so why not maximise your returns using credit cards?
From earning rewards points to funding an entire renovation project, credit cards can be an invaluable tool for property investors. Here are the 5 best credit cards for getting the most value out of your investments.
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1. Credit cards that earn rewards points on government bills
While most cards won’t let you earn points for government-related spending, some Amex and selected premium Mastercard and Visa cards still do. With these cards, you can earn rewards points for paying your property rates, ATO bills and even your stamp duty, which can turn into a neat lump sum of points.
Always check the card’s rewards program for eligibility, and to see how many points you’ll earn. Just remember you’ll pay a surcharge for using a credit card, so weigh up the points earned against the fees you’ll pay.
Depending on the circumstances, you may be able to claim credit card surcharges as a tax deduction.
2. Earn practical rewards points for renovation costs
If your strategy is to create equity through renovations, you can maximise your gains by earning rewards points at the same time. Rewards points can help offset renovation costs and travel expenses, leaving more profit in your pocket. Here are a couple of features to look for:
Bonus sign-up points: Several credit cards offer lump-sum points when you sign up as a new cardholder, some to the tune of 100k points or more.
You’ll usually have to meet minimum spend requirements to earn your points ($3,000 over 3 months, for example), which is a comfortable target if you fund the renovation expenses using the card.
You’ll also earn rewards points as you spend, too. Just make sure to pay off the card in full each month using your loan money so you’re not paying interest on your credit card balance.
Best earn rate: You can look for credit cards that earn the highest amount of points per dollar spent, or that earn points in the program you like. For instance, you might like the St George Amplify rewards program for redeeming points for gift cards and its cashback offer.
Or, you might want to focus on Qantas Points if you need to travel to visit your property.
Uncapped points earning: Some credit cards lower your earn rate after a certain limit is reached. If you know you’ll be spending a decent amount on your credit card, look for one that allows uncapped rewards points.
3. Cards that offer 0% interest periods
Credit cards that waive the interest charges for a certain period can be used to manage cashflow during renovations or repairs. You can fund the renovations using your credit card so you don’t have to dip into your savings or refinance your loan.
Once the property is ready for sale, you can use the profits to pay your credit card off without any damage to your pocket. Just make sure the card is paid off in full before the interest-free period ends.
4. Credit cards with specific rewards programs
Not all rewards points are part of frequent flyers or bank-affiliated programs. Some credit cards offer bonus rewards for shopping at certain businesses, which can be helpful if you’re planning on doing a lot of spending at certain stores.
For instance, the Kogan Money Black credit card earns its own rewards points for every dollar you spend with Kogan (which sells everything from electronics to landscaping goods), plus free shipping and discounts for program members.
Amex’s David Jones credit cards earn higher rewards points if you shop at DJ’s or any of the partnering businesses, which can be redeemed as cashback on your card to help offset costs.
5. Business cards with big business perks
They’re only for ABN-holders, but if you’re eligible, a business credit card can unlock big perks and make bookkeeping a snap, especially as your portfolio grows.
Business credit cards often include sign-up bonus points, free additional cardholders, and earn rewards on your spending, too. Some feature helpful business tools that allow you to export to accounting software like Xero, streamlining your end-of-year tax reporting.
While premium business credit cards come with high annual fees, there are still plenty for as little as $149 p.a.
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