Business credit cards offer flexible financing and many offer lucrative rewards in the form of cash back, or points and miles. Credit cards are also the safest way to pay for purchases, as you can dispute fraudulent charges or purchases where the goods or services aren’t delivered as agreed.
Still, if you’re not sure you’re getting the best value from your business credit card, you’re not alone.
Small business owners remain satisfied with their business credit cards overall, but those whose businesses have been hit hard by inflation report lower satisfaction with rewards earned per dollar spent and the ability to completely maximize rewards with most frequent purchases. That’s according to the J.D. Power 2022 U.S. Small Business Credit Card Satisfaction Study. Another JD Power survey found that just 31% of credit card customers feel their frequent purchases completely maximize their rewards earning.
Here we’ll share strategies for choosing and using business credit cards to maximize credit card rewards of all types.
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Most common types of credit card rewards programs
Credit card rewards typically fall into two broad buckets:
Cash Back Rewards
Cash back credit cards allow cardholders to earn a percentage of their purchase back as cash back credit that can be redeemed as a statement credit, or even as a check.
While the typical cash back reward is 1—2% of the eligible purchase, bonus cash back earned by spending in specific categories (such as dining, fuel, or office supplies) may earn higher cash back rewards. It’s like getting a discount on every purchase.
Points and Miles
With points and miles credit cards, cardholders accumulate points or miles (usually at the rate of 1-2 points or miles per dollar spent) that can be redeemed for travel (flights, hotels or car rentals), merchandise or other types of purchases. Points or miles can sometimes also be redeemed as cash back though the rate may not be as lucrative as cash back rewards cards.
Pros And Cons Of Each Type Of Rewards Program
If you don’t carry a balance, a rewards credit card is generally a no brainer if you qualify. By paying in full each month, you avoid interest charges while earning some type of reward. But each type of card has its pros and cons.
Cash Back Rewards Pros And Cons
Pros
- Every business owner can use cash
- Value of rewards is clear
- Cards with no annual fee available
Cons
- Value may be lower than higher-value points or miles
- Bonus categories may add complexity
Points And Miles Pros And Cons
Pros
- Points can be used for high-value redemptions
- Travel cards often come with a variety of other travel benefits
- Can combine credit card points with those earned from travel
Cons
- Redemption options limited on some cards
- Redeeming rewards can be difficult during peak travel times
- Rewards points may go unused
Examples of how to maximize credit card rewards programs
Here are a few ways to maximize your credit card rewards.
1. Understand your rewards. Reviewing the rewards your card offers is perhaps one of the most impactful things you can do when you first get a card. While reviewing the find print isn’t the most fun thing to do, think of it as a treasure hunt. It can alert you to benefits you may have missed when you applied, explain how to take advantage of rewards, and can help you avoid costly mistakes.
2. Use your card as often as possible. The more you spend on your card, the more you can earn in rewards. Use your card for as much of your business spending as possible while still sticking to your business budget. Caveat: if you carry balances and can’t pay in full, choose a card with a low interest rate (or even a 0% APR) to minimize interest charges.)
3. Consider your spending. Many reward cards offer higher rewards for spending in certain categories. If you choose a credit card that offers rewards in the categories where you spend the most, you’ll boost your rewards. For example, a business that spends a lot on gas will want a card that offers a higher cash-back rate or rewards points for spending in the fuel category.
4. Track bonus categories. Some cards will automatically assign bonus categories based on your spending, and others will assign bonus categories. Spending in those bonus categories (like gas stations or dining) can earn you bonus miles or bonus points.
If you have a card that assigns bonus categories based on your spending, you may want to try to group your purchases in categories to maximize rewards. (For example, buy most of your office supplies for the year in one month.) If your card assigns bonus categories, then you will also want to try to time purchases to take advantage of them.
5. Use the right card. Most business owners carry more than one business credit card. Use cards strategically to make the most of points or miles. Similar to the previous point, you can use a card that offers the highest level of rewards for your dining purchases, and another card that offers higher rewards for fuel.
6. Take advantage of welcome bonuses. New credit cards often come with lucrative welcome bonuses (also known as “sign up bonuses” or “limited time offers.”) These require you to spend a certain amount of money in a specific period of time; for example, spend $4000 in the first three billing cycles to earn extra cash back or extra miles. These can be a great way to accelerate your reward balances. Just make sure you understand the terms and conditions and meet the spending requirement.
7. Consider free employee cards. Employee spending will typically also earn rewards, so you may want to consider issuing employee cards rather than having employees pay for purchases with their personal cards and get reimbursed. Just understand you’re responsible for employee spending on those cards, so be sure to set up alerts and/or spending limits.
8. Redeem rewards. Don’t let your rewards sit for too long. If something happens (you fall behind on payments or close your business and your account) you could lose your rewards. When redeeming travel rewards, look for high-value redemptions; for example, some hotel loyalty programs offer a free night when you book a certain number of consecutive nights with points. For example:
- IHG Rewards members who redeem points for a consecutive four-night IHG® hotel stay, get a fourth Reward Night free redeemable at that same hotel during that same stay.
- Hilton Honors members at Silver level or above who book a standard room with Honors points for four nights get the fifth night at that hotel for free.
9. Look for promotions. You or someone in your company no doubt logs into your online account to review account activity, enter it into your bookkeeping software and to pay your bill. Start making it a habit to review card promotions at that time as well. You may get promotions to earn extra miles or cash back for purchases at certain retailers, for example. If those purchases fit into your spending plan, they can be a great way to boost your rewards.
10. Finance big purchases. Granted this doesn’t apply to all cards, since some carry high rates. But there are rewards credit cards that also offer 0% APR financing for several months while still allowing those purchases to accumulate rewards. This allows you to pay for that purchase over time and get rewarded: win-win. Just make sure you pay for the purchase before the intro rate expires; the go-to interest rate will usually be a high variable APR starting at 20% or higher.
Personal or business for the best credit card rewards programs
So should you use a business credit card or a personal credit card to earn rewards? The answer is pretty straightforward.
First, if you have a business— even as a freelancer or independent contractor— you should use a business credit card for business purchases and a personal credit card for personal purchases. This helps you track business expenses and draws a clear line between your business and personal finances. It’s especially important if you operate your business as an LLC, S Corporation or C Corporation, rather than as a sole proprietorship, where you run the risk of losing your legal protection if you commingle your finances.
That said, you may be able to get even more value by using a personal and business credit card from the same issuer. For example, if you have a business and personal co-branded airline card you may be able to earn and combine rewards on both and together get enough points for a business-class ticket.
If you’re worried that you can’t get a business credit card because you have a new business, keep in mind that most credit card companies review the owner’s personal credit scores (not business credit scores) and will consider income from all sources, not just the business. This makes business credit cards a popular choice, even among startups that may not be earning much revenue from the business yet.
Choosing the right credit card for your business
Sorting through credit card offers to choose the right credit card for your business may seem complicated, but there are a few simple questions you can ask yourself to help you decide which cards are right for you.
And yes, we used the word “cards” here, rather than “card” because most small business owners have more than one business credit card.
1. Know How You Spend. If you’ve been in business for a while, pull up your top spending categories from existing credit cards or your bookkeeping software. Understanding your spending habits can help you choose a card that rewards those types of purchases.
2. Evaluate Fees. Some premium cards can come with annual fees of several hundred dollars a year. For some business owners it’s worth it. Knowing how much you plan to spend on a card can help you understand whether a higher annual fee will be worth it. (Generally bigger spenders can offset the cost of an annual fee with higher rewards, as long as they don’t carry balances.) It can also help you determine whether you can meet the spending requirement for a welcome offer.
If you travel internationally, or if you regularly make purchases outside the US, be sure to choose a card with no foreign transaction fee which can add 2-4% to the cost of a purchase.
3. Consider brand loyalty. If you are loyal to a specific travel brand (hotel chain or airline, for example) it’s often worthwhile to get their co-branded credit card. You’ll usually earn premier status faster, upgrades, free checked bags on flights, and you can combine points from travel with points from spending on your travel rewards card to earn free travel faster.
If you’re not loyal to a particular brand, choose a card with flexible travel redemption. Chase Ultimate Rewards, American Express Membership Rewards and Capital One Spark Miles for Business are examples in this category.
4. Compare interest rates. If you will regularly carry a balance, the interest rate is your primary consideration. You may even choose a no-frills card with a lower-rate and use your credit card as your business line of credit. Some rewards cards offer 0% intro APRs but those typically last for several months to a year or more from the date of account opening. After that, the purchase rate will be higher.
5. Know your qualifications. Most small business credit cards from major card issuers will check the applicant’s personal credit score. (Once you get the card, though, it can likely help you establish business credit if you pay on time.) Nav can help you find business credit cards based on your qualifications.
6. Look beyond points and cash back. Other card benefits may also be beneficial. Some rewards cards offer cell phone insurance, extended warranties and price protection, for example. These benefits can also save you a chunk of change if you use them.
If you travel for business it’s a good idea to have at least one reward card that offers free rental car insurance, and trip interruption or cancellation benefits. These benefits may easily save you the cost of the annual fee.
Nav’s picks for the best credit card rewards programs
There are numerous reward credit card programs available and the best rewards card for your business may be very different from someone else’s. That said, here are some programs that often make lists of best credit card rewards programs.
Ink Business Preferred® Credit Card
You can earn a hefty welcome bonus with this card. New Cardmember Offer! Earn 100,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening. . Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases-with no limit to the amount you can earn.. The foreign transaction fee is $0.
All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Pros
- All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav
- This card is not currently available through Nav
- To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Cons
- All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav
- This card is not currently available through Nav
- To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Intro APR
Purchase APR
Annual Fee
Welcome Offer
Bank of America® Business Advantage Travel Rewards World Mastercard® credit card
Get an intro APR of 0% for 9 billing cycles on purchases, a $0.00 along with a welcome offer of 30,000 online bonus points after you make at least $3,000 in purchases in the first 90 days of your account opening which can be redeemed for a $300 statement credit towards travel or dining purchases..
This card also has offers points-based rewards of 3 points for every $1 spent for travel booked through the Bank of America® Travel Center and 1.5 rewards points for every $1 spent on all purchases..
Intro APR
Purchase APR
Annual Fee
Welcome Offer
The Blue Business® Plus Credit Card from American Express
With this popular Amex business credit card, you’ll get 0% on purchases for 12 months from date of account opening. Plus you’ll earn versatile American Express Membership Rewards points. Earn 2X points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter. Terms and limitations apply.. It’s a lot of value for a card with an annual fee of $0.
The Blue Business® Plus Credit Card from American Express
A great business card for flexible spending and travel rewards points.
Pros
- Competitive intro APR offer and rewards rate
- No annual fee
- For a limited time, earn Membership Rewards® points on initial spending.
Cons
- Foreign transaction fee.
Intro APR
Purchase APR
Annual Fee
Welcome Offer
Ink Business Cash® Credit Card
If you’re looking for a great cash back credit card, the Ink Business Cash® Credit Card is worth considering. There is a 0% Intro APR on Purchases for 12 months and a welcome offer. Earn $900 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.. Plus you’ll enjoy a $0 annual fee.
All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Pros
- All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav
- This card is not currently available through Nav
- To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Cons
- All information about the Chase Ink Business Cash℠ Credit Card has been collected independently by Nav
- This card is not currently available through Nav
- To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Intro APR
Purchase APR
Annual Fee
Welcome Offer
Frequently asked questions for maximizing credit card rewards
How can I maximize my credit card rewards?
Use the ten tips above to make sure you are taking advantage of the rewards your cards offer. Keep in mind that if a card doesn’t offer unlimited rewards, you may want to track your spending and switch to a different card if you max out on a particular type of reward.
What is the smartest way to use a credit card that has rewards?
The smartest way to use a credit card that has rewards is to use it for as many purchases as possible. If you use multiple cards, you will need to be strategic about using each one to earn as many points or miles as possible. Pay in full to avoid interest, and then redeem your rewards regularly.
What is the smartest way to use a credit card that has rewards?
The smartest way to use a credit card that has rewards is to use it for as many purchases as possible (unless you’re using multiple cards, in which case you will be strategic about using each one). Pay in full to avoid interest, and then redeem your rewards regularly.
What is a major perk to most credit cards?
One of the most underrated benefits of a credit card for small business owners is the line of credit most offer. The typical small business credit card allows you to pay for purchases over time which can be tremendously helpful when cash flow is tight.
While the interest rate on most credit cards won’t be as low as some small business loans from banks or traditional lenders, it can be cheaper than many types of alternative financing. And you may be able to find a 0% APR card to finance purchases for the first few months or year (or more).
What are 3 drawbacks of having a rewards credit card?
Three potential drawbacks of a rewards credit card are:
- The annual fee. Premium cards in particular (such as platinum cards) may have high annual fees. There are rewards cards that carry no annual fee or a low annual fee, especially the first year, but rewards may not be as enticing as premium cards.
- Temptation to overspend. If you’re just thinking about maximizing rewards you may be tempted to buy things your business doesn’t really need. That’s especially true if you are trying to meet a spending requirement to earn a sign up bonus.
- Debt. If you can’t pay your balance off in full each month, you’ll pay interest and that can get expensive quickly.
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Gerri Detweiler
Education Consultant, Nav
Gerri Detweiler, a financing and credit expert, has been featured in 4,500+ news stories and answered 10,000+ credit and lending questions online. In addition to Nav, her articles have appeared on Forbes, MarketWatch, and Startup Nation. She is the author or co-author of six books, including Finance Your Own Business, and she has also testified before Congress on consumer credit legislation.