Skymiles: How Entrepreneurs & Business Owners Leverage SkymilesSubmitted by The Entrepreneur's Advisor - Derek Notman on May 2nd, 2017
Tips on How to leverage money you & your business are already spending.
Fair warning, this is a long & detailed post. You can learn a lot and start earning miles almost instantly, but you will have to set aside the next 15-20 minutes to get the most value out of this article.
Entrepreneurs and business owners can always use more time and money. As a business owner who specializes working with entrepreneurs, I understand the value of these and have figured out a way to squeeze a little more out of both for my business & personal use.
As a Delta Diamond Medallion Sky Miles member who is well on his way to million miler status, and a member of over 25 other frequent flyer, hotel, and car rental programs, I have learned a few things about how these programs work and how they can be especially useful for entrepreneurs who own a business. As I am writing this article while on a flight for my business, I figured this would be a very appropriate topic to cover.
Although there are many different loyalty programs to pick from, the primary one I use is the Delta Skymiles frequent flyer program. The following post will go into some detail about how this program works and how I have used it to personally secure free international first class flights for me and my family. How I got Global Entry, CLEAR & TSA PreCheck security clearance, free of charge, and how I fly first class domestically almost all the time, for free. I will share tips on how I use this program and how to maximize it as a business owner.
Think of these skymiles programs as leverage, leverage for your business and personal life, that can increase your net after-tax cash flow.
This post may be a little long, but it is necessary to explain in more detail so I can spell out each step so you will be able to start leveraging your current spending almost right away!
Where to start?
First, you need to pick a loyalty program that works best for your situation. It could be for sky miles, hotel rewards, car rental points, or a combination of all of them. I chose to put my energy into the Delta loyalty program since I fly a lot for business and pleasure, and they & their partners fly pretty much anywhere. They also have a lot of non-airline partners like Hertz, Starwood Hotels, and AirBnB that allow you to receive status and additional bonus miles/points. I am also a member of all these.
Here is the car (Hertz Rent-a-racer Shelby Mustang) I was able to get, for the price of a cheap economy car, when I took a trip to Arizona using the Hertz rewards program and their partnership with Delta. My son loved it almost as much as I did!
Simply pick the loyalty program that fits best with your current life. You can always add more programs later as you start to learn how it all works.
►►► Here are some current offers & discounts you can take advantage of (I update these on a regular basis):
- Hertz: Operating in 150 countries across six continents, Hertz connects your world wherever you need to go and makes travel faster, easier and more rewarding. They are my preferred car rental company. Click here for 15% off your next rental with them
- Starwood Hotels: Starwood Hotels & Resorts Worldwide is one of the most well-known high-end hotel companies in the world. The chain's strength lies in eleven distinct lifestyle brands, an award-winning loyalty program, and nearly 200,000 talented associates worldwide.
Things to look for when deciding on a frequent flyer or loyalty program:
- Does it fit your lifestyle? When choosing a primary airline loyalty program make sure you would actually use it; do they fly where you fly? Do they have partners that you would use? Do their miles/points ever expire? This information is easily found on their website. Here is the information for the Delta Loyalty Program.
- Is it easy to track? Make sure the program(s) you sign up for have a central place for you to track your rewards, and make sure they have an app you can download to check things on the go.
- Do they have credit card partners that can help you leverage their program? More on this later, but for example Delta and American Express (AMEX) have a really strong partnership that can be hugely beneficial to you.
Sign up for frequent flyer & loyalty program(s)
Once you have settled on the loyalty program(s) you will use the most, you need to sign up for them. Almost always this is free to do. For Delta you can sign up on their website and be up and running within minutes. You will receive a Sky Miles # (your membership #) which will become a very important number to have! They usually will send you a welcome kit in the mail that includes your card, as well as giving you a virtual card. I always carry my card with me as it has a VIP phone number for my use, not to mention the card is a little reminder of all the benefits I receive.
Sign up for and Link your credit card(s) to your loyalty program(s).
So you have picked your loyalty program, signed up for it, now what? As a business owner I have a business credit card (multiple cards actually, more on this in a bit), I use this card to pay for pretty much everything I need to run my business except payroll, although I could even use it for that! I primarily use the Delta Platinum AMEX card. It is linked to my Delta Sky Miles account, this is done when you apply for the card.
So, every time I spend money on my business I am getting miles, 1 mile for each dollar spent. If I use the card to buy an airline ticket I get double miles. You can also have a non-business credit card, for your personal living expenses, tied to your miles/points program.
Most loyalty programs have partnered with credit card companies as a means to cross sell their services. If done correctly, using these relationships can be extremely beneficial. For example, Delta and AMEX (American Express) almost always have promotions going on for sign-up bonuses when you sign up for their card and spend so much in the first 3 months (although this sometimes can be 6 months or longer).
►►► Here are some of the cards we use and their current offers for sign up bonuses
(These offers tend to be better via my links than the ones you can find on Google)
Platinum Delta Skymiles® Business Credit Card from American Express - 70,000 Bonus miles plus 10,000 medallion bonus miles after spending $3,000 in 3 months.
Blue Delta Skymiles® Credit Card from American Express - 10,000 Bonus miles after spending $500 in first 3 months.
Hilton Honors Ascend Card from American Express - 100,000 Bonus points after spending $2,000 in 3 months and an extra $1,000 in the first 6 months.
Keep in mind that some credit cards have an annual fee. The Delta Platinum AMEX that I use the most has a $195/year fee. For the first year I have seen the offers where they will give you a $100 credit after your first purchase. As a business owner not only can you deduct this expense (verify this with your accountant), but you will see how that fee is more than worth all the benefits you get from the card, especially given the fact that you get one free companion ticket each year!
Loyalty Credit Cards vs. Travel Reward Cards
What is the difference and should you have both?
- Loyalty credit cards are like the Delta AMEX card I use, it is Delta branded and I only get miles with Delta for using it.
- The travel reward card is like my Capitol One Venture card. I get double points on anything I use the card for, and can then decide to use them for airline tickets, hotels, cars, etc.
For example, I took my family to Italy in the Fall of 2016. I used my Delta AMEX to pay for my airline tickets so I got double reward miles and helped trigger my MQM bonus (more on this later) for my medallion status. My wife and I used our Capitol One Venture points to get all of our lodging in Italy for free. We use that card to pay for personal living expenses.
So yes, I think you should have both. You can leverage what you are doing that much more, it simply means you need to make sure you are tracking them correctly.
How to track all your Credit Cards & Loyalty Programs
If you get more than a couple credit cards and join more than a few loyalty programs you will want to make sure you keep up to date with which points you have, where they are, when/if they expire, and which credit cards you have currently and which ones you have already had and canceled.
I do this in two ways. First, I have a simple excel sheet that I list each card I have had, when I took it out, when I triggered it, and when I canceled it. Keeping a list like this makes it easy to check up on your accounts on a regular basis (monthly is good).
Secondly I use the free version of AwardWallet. Once you have signed up for all your loyalty programs you want to be able to track all of them in one place, instead of having to log into each one separately. Other than my Delta account, I use AwardWallet to track all of them. They have a web version as well as an app for your smartphone or tablet. Create a free account and add all your loyalty programs, it is easy and a major time saver!
Free First Class International Tickets
Here is a real world example of how I used credit card signup bonuses to take my wife and son with me to the UK, first class, for free! Once I noticed the credit card offer going on at the time, 50,000 signup bonus miles for each separate card issued, my wife and I jumped at the opportunity. My wife and I actually have a couple different business entities we are involved with, thus we have several federal tax ID #’s.
We signed up a card for each tax ID # as well as one for each of us personally, and we did it all in one afternoon! Make sure you know what your cash flow and expenses are as you don’t want to take out more cards than you can realistically pay off right away. Only take enough out to pay expenses you already have, don’t use new cards to buy a bunch of stuff you don’t need.
We proceeded to take all the free miles we had accumulated and through a little digging found out that Delta had a promotion going on for flights to London, from Madison. We were able to apply all the miles we had just earned and exchange them for 3 free first class tickets!
Sure, this took a little bit of work to search for, sign up for, and eventually ‘purchase’ the tickets. But when we boarded the plane and my wife was given a glass of champagne and we all settled into our lay-flat seats for the flight to London, it was well worth the extra effort!
Let me address what you are probably thinking right now; ‘Taking out that many credits cards is crazy and will hurt my credit!’ Am I close? Well, this is not necessarily true. First off, my wife and I have excellent credit, both in the 800’s. Secondly, our credit scores do go down a few points each time we take out a credit card, especially when taking out multiple cards at once. But the end result is that we actually raised our credit scores! ‘How?’ you may be thinking. Let me explain.
Once we were approved for the cards, which is usually within 60 seconds of submitting your application, we are then issued the new cards and receive them in the mail within a few days. We then proceed to use each card to pay a variety of business and personal bills, just enough to trigger the signup bonus.
The trick here is to make sure you know exactly what is required to trigger your signup bonus. Is it spending $3,000 in the first 3 months? Whatever it is, this is crucial.
- We have a simple excel spreadsheet we use to track what cards we are working on, what the bonus is, the triggers needed, etc.
- Once we document that we have hit the spending threshold, we stop spending on that card.
- We then check the partner loyalty program daily to see when our miles, points, etc. have been credited.
- Once we have confirmed this, we then cancel that card. Yup, that’s right, we cancel that card.
You may now be thinking, but that too will hurt my credit. Well, it has been my experience that it doesn't. Over the last 4 years or so I have taken out and canceled around 30 credit cards (my wife has done the same), yet our credit scores have only gone up. Apparently paying off your credit cards in full and then canceling actually helps you.
You can track your credit scores for free using CreditKarma or WalletHub. CreditKarma & WalletHub both track all of your credit related information in one place. CreditKarma updates weekly, WalletHub updates daily. Managing your credit is definitely an important part of leveraging the money you are already spending., using one of these services will alert you to any changes and they even will sometimes give you special credit card bonus offers! I am using both CreditKarma & WalletHub to track everything and will see long term which works best for my situation. They are easy to sign up for so consider getting them both, tracking your credit is important!
One thing I have made sure to do is keep one credit card open indefinitely. A trick to credit scores is the overall length of your credit history. I have a card I opened up almost 20 years ago. I almost never use it, but it helps bring my average credit history up, which helps bring up my credit score. I also don’t cancel my main business credit card, as I use it so much and it carries a lot of ongoing benefits with it.
What you are left with now is a bunch of signup bonus miles or points, and an increasing credit score. You are now free to use the additional miles or points to your benefit for free or discounted travel.
Delta SkyBonus For Businesses
You can see how this all of a sudden can add up really quickly. In addition, as a business owner, I also signed up for the Delta SkyBonus program. It is free to sign up, but you must have a federal tax ID # for your business. This program gives your business skybonus points for each flight you or your employees take on Delta. This can really add up if you have a lot of employees who fly a lot. These points are in addition to any sky miles you are already earning.
I have a client who is the CEO and co-founder of a tech company who has employees on airplanes each week, I informed him of this program and he now has a bunch of points banked up for his business. He can choose to use them for his own business flights, or reward employees by upgrading them to first class every once in a while, or just use them for free flights to help with the bottom line.
In addition to these skybonus points, you could also be getting double miles for buying tickets with your Delta AMEX credit card. Initially this all takes a few minutes to set up and get organized, but then it is essentially on auto-pilot, pun intended!
As another form of leverage for your business, this free program can obviously provide you, your employees, and your business some valuable perks.
Leverage what you are already doing
Keep doing what you are doing, just adjust things a little. This is where the leverage comes in. For example, instead of paying your office rent, utilities, marketing, postage and so on with a business check, use your business credit card. Yes, it is one extra step, but actually saves you time since most bills can be set up automatically, like my cell phone is paid automatically on my credit card each month. Then, just make sure to pay it off each month!
Some places will not allow you to use a credit card to pay their bill, but there is a workaround for this. One option, which we use is Plastiq which allows us to pay vendors with our credit card, and then direct them to pay the actual bill with a paper check. There is a charge for this service, thus we typically only use it when we are triggering a credit card bonus.
For example, a recent credit card we trigger required $3,000 to be spent in three months. We used this 3rd party service to pay our rent. They charged us 2.5% ($75), sometimes this can be even less. But, we received 50,000 Delta miles for it. Which for Delta is equal, for a normal fair, to $500. In other words, I just paid $75 for a $500 flight somewhere, and I did it spending money I was already spending.
Delta Medallion (Frequent Flyer) Program
Virtually all airlines have frequent flyer loyalty programs. Being that I fly mainly with Delta I am part of their Medallion program. Essentially these programs reward people who fly with them. The more you fly with them the more they reward you. But, you must meet certain qualification requirements to trigger the different tiers, this is where it can get a bit confusing, especially as there is more than one way to meet these trigger requirements.
Delta has four tiers, or Medallion levels. Silver, Gold, Platinum, and Diamond. The qualification period for them is the calendar year, and they reset every January 1st. Here are there triggers for qualifying:
- To reach SILVER, you will need 25,000 MQMs or 30 MQSs and $3,000 MQD.
- To reach GOLD, you will need 50,000 MQMs or 60 MQSs and $6,000 MQDs.
- To reach PLATINUM, you will need 75,000 MQMs or 100 MQSs and $9,000 MQDs.
- To reach DIAMOND, you will need 125,000 MQMs or 140 MQSs and $15,000 MQDs.
*Medallion Qualification Miles (MQMs): earned based on distance flown.
*Medallion Qualification Segments (MQSs): earned based on segments flown.
*Medallion Qualification Dollars (MQDs - U.S.-based members only): measure your annual spending on Delta flights and on most partner flights. ***This can be waived if you spend $25,000 or more on your Delta AMEX credit card in the calendar year. For 2018 and on this waiver for Diamond Status is now $250,000.
Basically, you need to fly and spend a certain amount each year to qualify for these different levels. I am a Diamond Medallion member, which means I fly, a lot. So what exactly do I do to achieve Diamond status, and why is it of value to me?
My flights are a combination of business and personal. Delta doesn’t discriminate between the two, crediting you the same regardless of the purpose of your trip. For each flight I get at least 500 MQM’s, this is the minimum they credit, regardless of how short your flight is. I need 125,000 each calendar year to get Diamond status. For me, this is usually a combination of actual miles flown, rollover miles from the previous year, and bonus MQM’s from using my Delta AMEX credit card. Here is a little more on each:
- Actual miles (MQM’s) flown: You can see what this will be before even buying your ticket, see the picture below. These MQM’s go towards the amount you need to hit the different medallion tiers each year. I track this throughout the year in my Delta Sky Miles account and will even take end of year trips just to hit my MQM number for the year.
- Rollover MQM’s: If you go over what you need for any given year the extra MQM’s will rollover to the following year and count toward you achieving status that year. This can be really helpful particularly for the Gold and Platinum levels. My wife just got Platinum with Delta last year because she had a bunch of rollover MQM’s.
- Bonus MQM’s: These are very helpful as you don’t need to fly to get them. Getting bonus MQM’s are actually another example of leveraging what you are already spending.
- For example, when I spend $25,000 in a calendar year on my Delta Platinum AMEX credit card, they give me 10,000 bonus MQM’s. If I hit $50,000 in spending for the year, I get an additional 10,000 bonus MQM’s. Now this may sound like a lot of spending on a credit card, but when you look at adding up your rent/mortgage, marketing costs, flights, utilities, etc. you can actually hit these numbers relatively easily.
- Some Delta AMEX credit card offers also will give you some MQM’s just for signing up and hitting your initial spending trigger.
How does all this benefit you, your family, and your business?
As you may have experienced, flying can be awful. Long security lines, uncomfortable seats with too little leg room, having to pay for luggage, long layovers, expensive airport food, etc. Well, having status with an airline can help with a lot of these and more. The following is a list of benefits I receive as a Diamond Medallion member. The lower tiers have benefits as well which certainly improve the flying experience, but being a Diamond certainly has its advantages. The following perks are in no particular order.
I get to board when the first class cabin boards, regardless of where my seat is. This allows me to get settled and make sure I get space for my carry-on luggage right above me.
Global Entry Voucher (A Choice Benefit with Delta)
Not only does Global Entry expedite my entry back into the country, literally sometimes taking 2 minutes to clear immigration and customs, it also qualifies me for TSA PreCheck on all domestic airlines, not just Delta. This means I have additional security clearance allowing me to use the fast lanes. I don’t have to take my computer or toiletries out of my bag and can keep my shoes and jacket on. Now I can show up to the airport closer to my flight time, giving me more time with my family and business.
Better Seat Selection
When booking my flights I am able to pick the best seats in coach and not pay extra for them. This allows me to sit closer to the front, pick isle seats which I prefer, and get the benefit of getting off the plane sooner than most of the people on board.
Same Day Free Change and Confirmations
I just returned from a sky miles trip to Scotland. On my return trip I noticed there was an earlier flight to my final destination, thus allowing me to shave hours off my total trip time. First, there is normally a change fee to change flights, but as a Diamond the fee is waived. But, I learned in this instance that instead of being put on the standby list for the earlier flight where there would still be a chance I wouldn't get a seat, as a Diamond I was guaranteed a confirmed seat for the earlier flight. I was able to bypass the long standby list, and was able to relax in the sky lounge, have a shower, and eat a hot meal, all for free before my earlier flight!
Unlimited free upgrades to first class
On domestic flights I, and one travel companion of mine, are put on a priority upgrade list, starting to clear upgrades to first/business class up to 5 days before the flight departs. There is no cost to this and I tend to get upgraded about 90% of the time. And on rare occasions, I will even get an upgrade to business class on international flights. For example, my father-in-law and I went to Ireland at the end of December to get sky miles so I could qualify for Diamond for 2016. On the return trip we were both upgraded to the lay-flat seats where we were able to enjoy a 5 course meal, etc.
Free Delta Sky Club Access
This is definitely one of my favorites. I am allowed to use Delta and any partner sky lounges wherever I fly, for free. These lounges vary in size and service, but they all have a quiet space to relax in comfortable chairs where you can enjoy free food (hot and cold meals), free drinks, and even some have outside spaces where you can enjoy the sun and fresh air. In addition to these perks, the bigger lounges have free showers! This is my favorite sky club benefit. Before and after a long international flight, or simply for a long layover on a business trip, being able to take a hot shower is a great way to rejuvenate.
CLEAR Security Clearance
In addition to the TSA PreCheck and Global Entry programs, I recently was also given CLEAR security clearance for free. This program puts you at the very front of all security lines, including the flight crew. Being able to skip the long lines is a great feeling, and using the CLEAR program is the fastest one available.
Free Companion Airfare
This is a benefit for having the Delta Platinum AMEX. I get one voucher a year that I can use for someone flying with me, or even give it to someone else to use. It is a basic fare, without upgrade availability and is not eligible for MQM’s, but is still worth something to be able to fly for free (other than paying the tax).
Diamond and Platinum medallion members receive what are called Choice benefits. These are benefit menus allowing you to pick from a selection of additional benefits to those already included with your Medallion status. I tend to choose the 4 global upgrade certificates as one of my choices, and then whatever else I am feeling like at the time. Diamonds get to pick three and Platinum’s one choice benefit (starting for the 2018 year based upon 2017 flights).
The global upgrade certificates are really valuable! For example, the flight I referenced above tends to hover around $1,400 for a round trip ticket to South Africa. Which by the way is a great way to earn MQM’s given how far a distance the flight is! Since this flight is the 3rd longest in the world (or has been at one point) at just over 16 hours direct from Atlanta, it is nice to be able to have a lay flat seat. But, to buy this seat out of pocket is usually around $10,000! However, using the global upgrade certificate I can now get this $10,000 seat for the price of my coach ticket!
Free Checked Luggage
Although I almost never check luggage, even on international flights, I still can get up to three bags, up to 50 pounds each, checked for free. This certainly can be a benefit if you travel ‘heavy’.
Why does all this matter?
Regardless if you are an entrepreneur business owner or not, we all can appreciate having more time to do what we love, and having more money to do them. Spending a little time familiarizing yourself with the benefits of these loyalty programs can have huge benefits for you and your business. Not only can they save you time, they can save you and your business money. For startups that need every penny, this is especially important, and smart as it shows you use leverage where you can find it.
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