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Starting and running a small business isn’t an endeavor for the faint of heart. Even with small business optimism reaching record highs and 60% of small business owners anticipating growth over the next five years, finding the time, people, and resources to succeed is a constant challenge.
If you’re looking for fresh ways to bolster your business, and haven’t done so already, consider taking advantage of the rewards programs business credit cards offer. Credit cards that feature cashback programs or travel rewards that can offset regular business costs as well as provide some attractive perks.
Why choosing the right business card makes all the difference
According to the Federal Reserve, the total outstanding debt for personal credit cards, business credit cards and revolving debt hit $1.058 trillion in January 2019. With such high credit card use (and debt), it’s critical to look at the rewards offered and come up with a strategy for their use before selecting a business credit card.
“Business cards are not cheap financing tools,” says Brian Riley, director, credit advisory service for Mercator Advisory Group. “But there are certainly opportunities for small business owners to direct their transactions toward reward incentives.”
Riley advises business owners to weigh a variety of factors when selecting a small business credit card. He suggests carefully analyzing company spending habits and keeping an eye out for reward multipliers or incentives for purchasing from select vendors.
Do you plan on putting all your expenses on the card and then paying off the balance each month? “Take a reward card with a good multiplier,” Riley advises. For example, there are cash back cards offering anywhere from 2% to 5% back for purchases in select spending categories, such as office supply stores or internet and phone services. Or travel business cards that award multiple points per dollar on certain purchases, such as travel expenses or dining out.
Does your business have a limited amount of working capital? Riley suggests using a leaner credit card with low interest even if it only offers limited points.
Creative uses of business card rewards
So once you’ve picked a card and started racking up rewards, how can you creatively put those points to use? Here are three ways small business owners are using a little business savvy when it comes to business credit card rewards.
1. Redeem card rewards for employee gift cards
Matthew Ross is the co-founder and chief operating officer of The Slumber Yard, a mattress and bedding product review site and YouTube channel. Along with his co-founder, Jeff Rizzo, Ross uses the rewards from the company’s Capital One® Spark® Cash for Business to help boost employee morale.
2% Cash Back for your business on every purchase, everywhere
Limited Time Offer: Earn up to $2,000 in cash bonuses. Earn a $500 cash bonus when you spend $5,000 in the first 3 months and earn $1,500 when you spend $50,000 in the first 6 months of your account opening
Redeem cash back for any amount at any time
- Limited Time Offer: Earn up to $2,000 in cash bonuses
- Earn a $500 cash bonus when you spend $5,000 in the first 3 months and earn $1,500 when you spend $50,000 in the first 6 months of your account opening
- Earn unlimited 2% cash back for your business on every purchase, everywhere, no limits or category restrictions
- $0 annual fee for the first year; $95 after that
- Free employee cards, which also earn unlimited 2% cash back on all purchases
- $0 Fraud Liability if your card is lost or stolen
- Rewards won't expire for the life of the account, and you can redeem your cash back for any amount
- No foreign transaction fees
See additional details for Capital One® Spark® Cash for Business
Instead of taking the cash back rewards for themselves, Ross and Rizzo redeem the points for gift cards they give to their employees. “In our eyes, these gift cards replace cash bonuses,” says Ross. “Rather than giving small cash bonuses during the year and having to pay employer taxes on those amounts, we just give [employees] what we consider to be free gift cards.”
Because their card racks up points quickly, Ross and Rizzo can reward their staff with gift cards much more frequently than cash bonuses. They’re also able to tailor the gift cards to each team member.
“We can personalize the gift cards we give to each employee,” says Ross. “For example, we have a young female employee who drives 200 miles every weekend to see her boyfriend, so we make sure to get her Chevron gift cards.”
2. Ease travel stress with cardholder perks
While not every entrepreneur needs to include travel in his or her business costs, the Bureau of Transportation Statistics reports that Americans make more than 405 million long-distance business trips each year. Traveling can be stressful, but some business travel cards come with added perks that can make life on the road a bit easier.
“We put nearly all of our expenses on the card, including a large advertising spend,” says John Holloway, co-founder and director of digital strategy at NoExam.com. “We started out with an American Express® Business Gold Card. As our business grew, we upgraded to a The Business Platinum® Card from American Express.”
Earn 35,000 Membership Rewards® points after you spend $5,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.
Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month*
No foreign transaction fees & many helpful business tools*
- Earn 35,000 Membership Rewards® points after you spend $5,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.*
- MORE REWARDS: Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month**
- **4X points apply to the first $150,000 in combined purchases from these 2 categories each calendar year.*
- AIRLINE BONUS: Get 25% points back after you use points for all or part of an eligible flight booked with Amex Travel, up to 250,000 points back per calendar year.*
- PAY OVER TIME OPTION: A flexible payment option to help manage cash flow on purchases of $100 or more.*
- Access to the Working Capital Terms program: get additional funding beyond what you can spend on Business Gold with this flexible funding solution designed to pay U.S. based vendor invoices directly when cards are not accepted.*
- *Terms Apply
- See Rates & Fees
See additional details for American Express® Business Gold Card
Earn up to 100,000 Membership Rewards® points*
Complimentary access to over 1000+ airport lounges*
Get 50% more Membership Rewards® points. That's 1.5 points per dollar, on each eligible purchase of $5,000 or more*
- Welcome Offer: Earn up to 100,000 Membership Rewards® points.
- Earn 50,000 Membership Rewards® points after you spend $10,000 and an extra 50,000 points after you spend an additional $15,000 all on qualifying purchases within your first 3 months of Card Membership.
- Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com.
- Get 50% more Membership Rewards® points. That's 1.5 points per dollar, on each eligible purchase of $5,000 or more. You can get up to 1 million additional points per year.
- 35% Airline Bonus: Use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back, up to 500,000 bonus points per calendar year.
- Enroll to get up to $200 in statement credits annually by getting up to $100 semi-annually for U.S. purchases with Dell. Terms apply.
- Terms Apply
- See Rates & Fees
See additional details for The Business Platinum® Card from American Express
Along with using reward points to buy office supplies on Amazon and to offset travel expenses to meetings and conferences, the leadership team at NoExam.com, a digital life insurance brokerage, uses the card’s additional rewards to help them relax before a flight via access to cardholder lounges.
“We always fly out of the Atlanta airport, which is a Delta hub,” says Holloway. “The access to the Delta Sky Club was a major perk for us staying with the same card all of this time.”
3. Use cashback rewards to offset supply costs
According to the National Small Business Association’s 2017 Year-End Economic Report, 20% of business owners say lack of available capital is one of the top three most significant challenges to their future growth and survival. The same report states that 31% of owners used credit cards to meet their capital needs.
Some credit cards have partnerships that are especially beneficial when you need to purchase goods or supplies for your business. Tracey S. Lawrence, a family coach and founder of Grand Family Planning LLC, frequently takes advantage of the rewards from her Amazon Prime Rewards Visa Signature Card.
Read our review of Amazon credit cards
“I pay for utilities and services with the card as well as merchandise, earning points that allow me to save significantly on the cost of goods and supplies I purchase on Amazon,” says Lawrence.
Credit card rewards points are not just a borrowing bonus, they’re a gateway toward growing your business and strengthening relationships. Whether you’re taking your favorite client to dinner or offering rewards as benefits to a great employee, you can use your rewards credit cards for more than just purchasing power.
The information related to the Amazon Prime Rewards Visa Signature Card has been collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to Chase credit card offers. See chase.com for more information.