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Credit vs Debit Cards, with Erik J. Olson

Episode #1342

When Erik and Kevin first started Array Digital, they only have debit cards because they don’t want to get into a situation where they blow a ton of money. Find out if you should get a credit card or a debit card for your business in this episode.

September 28, 2022

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Episode Transcript

Erik J. Olson (00:00):

Should you get a credit card or a debit card for your business? What is happening? This is Erik J. Olson? When I first started Array Digital with Kevin Daisey, we only had debit cards. That was it because we did not wanna get into a situation where we were blown a ton of money. We only wanted to spend the money that we had in our bank account at most, and not even all of that, because if we spent it all, we’d probably be in trouble. So we started off with debit cards. And one of the interesting things is at some point the American express rep was like trying to convince me. And I’m like, nah, I’m not, I’m not interested cause I don’t, I don’t wanna balance. But then we found out that if we spend our money on an American express, instead of using a debit card, then we can get mileage points, right.


And we could start to fly for free. And that was pretty enticing. And also like with our business model, a lot of our clients had advertised. They will pay us the full amount of advertising, including the media buy the media spend. So if they give us say 10 grand, we keep two for our own services and we spend 8,000. Well, when we spend that $8,000, we get 8,000 points. Maybe even more, depending on the promotions that the credit card American express or any card that you use has there are other cars, by the way, there is a capital one for business where it gives you 2% cash back. So let’s say you dropped $8,000 on that, on that capital one card you would get Hmm. What’s the math 1600. No, not 60, probably 160 bucks. Gosh, now I gotta do it. Let’s see here.


$8,000. It’s gotta be, it’s gotta be 160 bucks, but let’s see. 8,000 times 0.02 equals 160 bucks. So is that a lot of money? No, but let’s say you do that a hundred times in a month. Okay. Now we’re starting to talk about real money, right? So these point sees rewards. They add up over time. And so when I realized that I’m like, okay, let’s give it a shot. But I said to the American express rep, I, I don’t wanna have a big balance. She goes, well, look you Erik, if you really want, you can log in like every single day to our website and you can pay it off. And I was like, yeah, good. I guess. But then I realized, well, what’s the point? It doesn’t really matter. As long as we’re keeping our books up to date, we know how much we spent to date.


when the bill comes, I I’m ready for it. Right? The money’s sitting there just waiting. And it’s just a matter of paying it off later, instead of paying it off. Now we never let a credit card roll over month to month because then you pay the interest. So I’m, I’m what I would call like a credit card mooch, meaning I’m gonna take as much value outta that credit card as possible without giving anything back. So I wanna take hundreds of thousands of frequent flyer miles out of their program and not pay a single penny in interest. That’s

Erik J. Olson (02:59):

My goal. That’s my goal. Every single time, every month, every year with every credit card I don’t ever wanna pay interest. So I always wanna pay it off every single time. But I want to extract value whether it’s 8,000 frequent fire miles or 160 bucks, if you get 2% cash back. So we switch to that. We switched to credit cards for the vast majority of our business. Now Kevin and I still individually have debit cards, tied to one of our bank accounts called petty cash. We put a couple hundred bucks in there a month and then we can use it for just the miscellaneous stuff that comes up. If I need to buy a book of stamps, as an example, I’ll use petty cash. If Kevin and I go out to lunch and we talk about business, which that’s all we talk about, then we will, you know, it’s a business expense, we’ll use petty cash.


So we still have debit cards, but not like we used to. We used to run the business on our debit cards and pay for advertising with debit cards. And now the vast majority, I mean 99.9% of the money that we spend on a card now goes on our American express. Now there is a downside by the way of American express not really a downside, but the upside is capped. And here’s what I mean. They have a program where you can get like three X points or four X points, meaning for every dollar you spend, instead of getting one point, you may get four points, right? And what that means is like, you can grow your balance by like four times the amount, but that only lasts for the first, I think it’s $150,000 per credit card per year. So let’s say you get a brand new credit card as an American express.


And it’s in this program. And I, these numbers are going from memory as far as like the limit, but the first $100,000 you spend in a particular category, you’ll get four times that in frequent fire miles. So you’ll spend 150 and you’ll get 600,000 in frequent fire miles. But then that hundred and 51st, a hundred 50th and $1 first I’m really butchering this hundred 50, the $1 after 150,000 <laugh> and thereafter only gets one point, right? So what we did is we now have multiple American express card. We wanna maximize the four X that we get downside. You have to pay $250 a year per card, but I’m like, well, if I can get 600,000 points for 250 bucks, Hmm, that’s a good deal. So we have a, a combination again of credit cards and debit cards. The vast majority goes on credit card at this point because of the perks I would recommend the same. I hope that helped. Hey, look we’ve been doing this podcast for many, many, many, many years. This takes time. I mean, it’s a Friday afternoon of 5:06.

Erik J. Olson (05:57):

Everyone’s gone. I’m here. I’m recording this cuz I look, I, I get very little out of this podcast besides it’s a passion project. I want to teach other entrepreneurs like you, the lessons that we have learned the hard way, but I, I need your help. I, I, I want to get my word out too. As many people as possible. I know that, you know, other business owners, entrepreneurs, people who wanna start their own business, all I’m asking is will you share this? Please share this episode or the podcast journey to a hundred million dollars with a person that you know that this could benefit. It would mean the world. To me, it, I want this to grow. I wanna help more people avoid the mistakes that I’ve made. Please refer our podcast to an entrepreneur, you know? Oh, and if you have any questions for me, you can hit me up on Instagram. You can find me there @erik.j.olson. That’s Erik, which is E R I K dot J dot O L S O N.

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About The Hosts

  • Erik J. Olson is an award-winning digital marketer & entrepreneur. The Founder & CEO of Array Digital, he is also the host of the Journey to $100 Million Flash Briefing and daily podcast, and the organizer of the Marketers Anonymous monthly meetups.

  • Kevin Daisey is an award-winning digital marketer & entrepreneur. He started his first company when he was just 23, and is the Founder & CMO of Array Digital. Kevin is the also the co-host of the Journey to $100 Million Flash Briefing and daily podcast, and the co-organizer of the Marketers Anonymous monthly meetups.

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Website Design, Online Advertising, SEO, Social Media & Digital Marketing.
© Array Digital LLC