What is a credit card for advertising spend?
A credit card for advertising spend is typically a business credit card that allows companies to pay for their advertising expenses while potentially earning rewards, cashback, or other benefits on those transactions.
Advertising spend can include online platforms like Google Ads, Facebook Ads, LinkedIn Ads, or other digital marketing channels, as well as traditional methods such as print, TV, or radio advertising. These cards are particularly useful for businesses looking to manage cash flow, track expenses, and maximise the value of their marketing budget.
Types of credit cards suitable for advertising spend
When choosing a credit card for advertising spend, consider the following types, each are suitable to different business needs:
- Rewards credit cards: These cards earn points, cashback, or travel rewards on all eligible purchases, including advertising. They are particularly useful for businesses looking to spend with a frequent flyer credit card, which can maximise their earn rate of Qantas Points or Velocity Points.
- No foreign transaction fees credit cards: Ideal for businesses that advertise on international platforms, these cards save on currency conversion fees, which can be significant for large ad spends. These cards are particularly useful for businesses running ads on platforms like Google Ads or Facebook Ads, which often charge in USD, saving on the 2-3% foreign transaction fee typically charged by other cards.
- High limit credit cards: For businesses with large advertising budgets, a high credit limit ensures they can cover expenses without hitting their limit. These cards are often business or premium cards and are essential for businesses with monthly ad spends of $40,000 or more.
- Charge cards: Charge cards require the balance to be paid in full each month but often come with higher limits and additional perks, making them suitable for businesses with large, fluctuating ad spends.
Benefits of using a credit card for advertising spend
- Earn rewards: Many business credit cards offer rewards points, cashback, or travel rewards on all eligible purchases, including advertising. For example, certain American Express cards earn 1.5 Qantas Points per $1 on eligible Qantas purchases and 0.66 Qantas Points per $1 on other eligible purchases.
- Cash flow management: Credit cards provide a short-term loan, allowing businesses to pay for advertising without immediately depleting their cash reserves. This is particularly useful for businesses with seasonal advertising needs or those waiting for payment from clients. For instance, a business running a large Google Ads campaign can spread the cost over the interest-free period, improving cash flow.
- Expense tracking: Business credit cards often come with tools to categorise and monitor spending, which simplifies accounting and tax reporting. Since advertising expenses are tax-deductible in Australia, accurate tracking is essential. Many cards integrate with accounting software like Xero or QuickBooks, making it easier to manage expenses.
- No foreign transaction fees: For businesses that advertise on international platforms, e.g., Google Ads and Facebook Ads are in USD, using a credit card with no foreign transaction fees can save on currency conversion costs. Foreign transaction fees can be 2-3% of the transaction amount, which can add up for large ad spends.
Credit Card Compare expert on choosing a credit card for ad spend
David Boyd, co-founder of Credit Card Compare, advises:
"When choosing a credit card for advertising spend, look for one that offers rewards on all eligible purchases and has no foreign transaction fees if you advertise internationally.
Also, ensure the card’s credit limit meets your needs and that you can manage repayments to avoid high interest charges. For businesses, the ability to track expenses and integrate with accounting software is a bonus."
Important things to keep in mind when choosing a credit card for advertising spend
When selecting a credit card for advertising spend, consider the following factors to ensure it meets your business needs:
1. Interest rates
If the business cannot pay off the balance in full each month, high interest rates can negate the benefits of rewards. Credit Card Compare research shows that credit cards in Australia typically have interest rates of 19-20% p.a., which can add significant costs if the balance is carried. Look for cards with low interest rates or consider paying off the balance monthly to avoid interest charges.
2. Fees
- Annual fees: Some premium cards charge high annual fees (e.g., $450 for the American Express Qantas Business Card) but offer better rewards. Check if the rewards justify the cost, especially for high ad spends.
- Foreign transaction fees: If you advertise internationally, avoid cards with foreign transaction fees (usually 2-3%).
- Other fees: Look out for transaction fees, late payment fees, or cash advance fees, which can add up for businesses with frequent ad spend.
3. Rewards structure
While some US cards offer bonus rewards specifically for advertising categories. Australian cards generally offer rewards on all eligible purchases without specific advertising categories. For example, the CommBank Business Awards Card earns points on all spending, which can still be valuable for ad spend. Check if rewards can be redeemed for value that benefits your business, such as cashback, travel points, or gift cards.
4. Credit limit
Ensure the card’s credit limit is sufficient for your advertising needs, especially if you have seasonal spikes in ad spend. High limit cards like the American Express Corporate Platinum Card can offer limits up to $100,000 or more, subject to review, which is crucial for businesses with monthly ad spends of $40,000 or more.
5. Tax deductions
Advertising expenses paid with a credit card are tax-deductible in Australia. Use expense tracking tools to keep accurate records for tax purposes, which is facilitated by many business cards integrating with accounting software like Xero or QuickBooks.
