Should You Get the Ink Plus or Ink Cash?

Choosing which travel rewards credit cards to carry in your wallet can be a challenging decision. This is especially true when you’re deciding between two very similar cards. I recently faced this exact dilemma in choosing between the Ink Plus Business Card and the Ink Cash Business Card, and today I’ll highlight the key differences between the two and provide some strategies for deciding which is best for you.

Let’s begin with a quick overview of the key benefits of each card:

Ink Plus Business Card

• Earn 60,000 bonus points after you spend $5,000 on purchases in the first three months from account opening.
• Earn 5 points per dollar on the first $50,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year.
• Earn 2 points per dollar on the first $50,000 spent in combined purchases at gas stations and hotel accommodations when purchased directly with the hotel each account anniversary year.
• Earn 1 point per dollar on all other purchases—with no limit to the amount you can earn.
• No foreign transaction fees
• Employee cards at no additional cost
• $95 Annual Fee

Ink Cash Business Card

• Earn $200 bonus cash back after you spend $3,000 on purchases in the first three months from account opening.
• Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year.
• Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year.
• Earn 1% cash back on all other card purchases with no limit to the amount you can earn.
• 0% introductory APR for 12 months on purchases and balance transfers
• Employee cards at no additional cost
• No annual fee

At first glance, it may seem obvious that the Ink Plus is the more rewarding card to carry given that it earns Ultimate Rewards points, a currency that regularly appears near the top of TPG’s valuations (pegged at 2.1 cents apiece in his most recent iteration). Clearly this is a better option than simple cash back, right?

That analysis leaves out one of the most important aspects of the Ink Cash card. Your earnings actually accumulate as points that can then be redeemed for cash back at a rate of 1,000 points = $10. However, if you also have a card like the Chase Sapphire Preferred Card, you can actually convert these standard cash-back points from the Ink Cash into full, transferable Ultimate Rewards points, much like you can with the Chase Freedom and new Chase Freedom Unlimited. Check out this post for complete details on how to do this.

Here’s a quick breakdown of the other key differences on the two cards:

These differences can be quite significant when you think about how you typically use the card. For starters, the sign-up bonus on the Ink Plus Business Card is significantly higher, worth $1,260 based on TPG’s most recent valuations. The Ink Cash Business Card only gives you $200, though remember that this can be bumped to $420 if you can convert your earnings to full Ultimate Rewards points.

You’ll also have slightly different bonus categories, as the Ink Plus gives you double points at gas stations and hotels while the Ink Cash gives you double cash back at gas stations and restaurant. In addition, you can earn these bonuses (plus the 5x bonuses at office supply stores and on cellular phone, landline, internet and cable TV services) for double the amount of spending on the Ink Plus.

Finally, you’ll pay a $95 annual fee on the Ink Plus but will be subject to a 3% foreign transaction fee on the Ink Cash if you use your card abroad.

So when does it make sense to have one over the other? Here are two ways to think about this question when deciding between these two cards.

1. If you don’t have the Chase Sapphire Preferred Card, go with the Ink Plus.

The first consideration relates to the points you earn on the card. As I mention above, the Ink Cash is technically a cash-back card but allows you to convert those earnings to full Ultimate Rewards points if you have the Sapphire Preferred. If you don’t, the Ink Cash becomes an inferior card to the Ink Plus in just about every way.

2. If you travel abroad frequently and don’t have another card that waives foreign transaction fees, go with the Ink Plus.

A second consideration relates to the fees you’d pay for using the card outside the country. While I certainly hope that you have a card with no foreign transaction fees in your wallet, if you don’t and regularly travel abroad, the Ink Plus is a much better option. In fact, with the 3% fee charged on the Ink Cash, it’ll only take roughly $3,167 in spending outside the US to wind up spending more in these fees than the $95 annual fee on the Ink Plus.

If you’ve answered these two questions and are still torn between the Ink Plus and Ink Cash, you’re not alone! Here’s some additional guidance for picking one over the other:

3. Go with the Ink Plus in year one.

This should be a no-brainer, but even if you do hold the Sapphire Preferred, the extra sign-up bonus on the Ink Plus is worth far more than the $95 annual fee. Once you’ve used the card for a year, you can reevaluate your spending habits and see if it makes sense to continue paying the annual fee or downgrade the card to the Ink Cash. This is exactly what I decided to do after I crunched the numbers and fell below the threshold of this next suggestion…

4. Stick with the Ink Plus beyond year one if you spend $26,130.95 or more at office supply stores and on telecommunications purchases each year.

One of the other key differences highlighted above is the cap on earning the 5x and 2x bonuses. Each one is limited to $50,000 on the Ink Plus and $25,000 on the Ink Cash in a cardmember year. That means that every dollar you spend in these categories above $25,000 on the Ink Cash will only get you a single point. For the Ink Cash, the same holds true for any dollar spent above $50,000.

So how do we get to the $26,130.95 number? It’s all about determining the break-even point to make up the $95 annual fee. Remember that anything above $25,000 on the Ink Cash earns 1 point per dollar, while anything between $25,000 and $50,000 on the Ink Plus would continue to earn 5 points per dollar. That difference of 4 points is worth 8.4 cents based on TPG’s valuations, so for every dollar you spend above $25,000 on the Ink Plus, you’re taking in an additional 8.4 cents worth of points. When you divide the annual fee ($95) by this added value ($0.084), you get $1,130.95. This additional bonus spending in the 5x category will cover the $95 annual fee and make the Ink Plus the better option.

When I went through my spending history, I saw that I wasn’t spending anywhere near $25,000 a year on these types of purchases. This indicated that I could enjoy similar benefits and earning rates with the Ink Cash plus still have access to the Ultimate Rewards program, all without the $95 annual fee.

Other Considerations

In addition to thinking about these key differences between the Ink Plus Business Card and the Ink Cash Business Card, it’s also critical to recognize that you don’t need to have a formal business to apply for either one of these cards. Even though both applications ask for a Federal Employer Identification Number (EIN), you can simply use your Social Security Number and apply as a sole proprietor. Both my wife and I have Ink products, and I didn’t have a formal EIN until last year. There are many reasons why you might want a business credit card: You might be a freelancer or you could sell items on Ebay or Amazon. These cards can help keep your expenses separate.

However, you definitely want to keep in mind Chase’s much-maligned 5/24 rule. In essence, you have a very slim chance at being approved for either one of these cards if you have opened 5 or more credit accounts within the previous 24 months. If you’re new to the hobby, this probably won’t be a problem. However, I would strongly encourage you to prioritize your applications for Ultimate Rewards-earning credit cards first.

Bottom Line

Both the Ink Plus Business Card and Ink Cash Business Card are solid candidates to add to your wallet, and if you also have the Chase Sapphire Preferred Card, the Ink Cash becomes much more than a cash-back credit card. While the Ink Plus is the clear winner in year one, be sure to crunch the numbers and make sure that it’s worth incurring the $95 annual fee every year thereafter. Like me, you may find that you can enjoy the exact same earning rates with no annual fee.

Source: thepointsguy.com