If you run your own small business, then you are probably making plenty of purchases each day. As a result, you have the opportunity to earn valuable points and miles from these transactions, but only if you use the right business credit card.
Thankfully, the credit card industry is fiercely competing for your business and each issuer is continuously trying to outdo its competitors by offering small business owners the most rewards. Here’s how to maximize the value of the rewards you receive, just for making the purchases necessary to run your business.
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Benefits Of Credit Rewards And Miles
Don’t underestimate the benefits of credit card rewards points and miles, especially as a small business owner. Used for every day business expenses. Earn points or miles for every dollar you spend. These points or miles can be redeemed for a variety of rewards, such as hotel rooms, flights or airline upgrades, rental cars, travel experiences, and more.
Add in sign up bonuses or welcome offers and you can get hundreds or thousands of dollars in extra value just by using a business credit card.
How Reward Points And Miles Work On Business Credit Cards
Reward points and miles are earned by making purchases on your card. For example, with a card that offers 1 point per dollar spent, you’ll earn 100 points per $100 spent. The number of points or miles you earn will depend on the card and the type of purchase. Some cards offer bonus points for purchases in certain categories, for example.
You can then redeem those points or miles in various ways. With a co-branded hotel credit card, for example, you may redeem points toward hotel rooms in properties under that brand.
This type of card can be helpful if you are loyal to a particular travel brand.
Let’s say you typically fly United, Delta, or another airline. Getting one of their co-branded cards allows you to earn miles you can use to supplement the miles you earn from flying. And those cards usually also get you priority boarding and free checked bags. Premium cards may also offer airport lounge access.
On the other hand, reward points in a flexible program such as Chase Ultimate Rewards and American Express Membership Rewards let you book travel with a wide variety of hotels, airlines, and other providers. Miles may also be transferred to a variety of travel partner programs.
Types Of Rewards Programs Available
The three main types of credit card rewards programs are:
1. Points-based rewards programs: This type of rewards program allows cardholders to accumulate points (or miles) for every purchase they make. Points can then be redeemed for travel or other rewards. They can also often be applied to Amazon or other types of merchandise purchases, and may also be redeemed as a statement credit.
2. Cash-back rewards program: This type of rewards program gives customers a percentage of their purchase back in the form of cash. Cash can be redeemed as a statement credit, or even by check.
3. Tiered rewards program: Operating under the two models above (points or cash back), these rewards programs offer customers different levels of rewards based on how much they spend. Spending in certain categories (often called “bonus categories” or “spending categories”) may earn a higher level of rewards.
Of course there are plenty of other business credit card perks that can add even more value to these cards, including purchase protection, extended warranties, first class upgrades, or cell phone protection.
Tips On Earning The Most Rewards Points And Miles
If you’re going to take the time to get a new business credit card, you’ll want to make the most of it. Here are some ways to do that.
1. Look For Opportunities To Earn Bonus Rewards
While purchases on most reward credit cards will only earn one point or mile per dollar spent, you should always try to earn multiple points whenever possible. Fortunately, these kinds of bonuses are targeted at frequent business expenses. For example, with the American Express® Business Gold Card you can earn more in the categories where you spend more. Earn 4X Membership Rewards® points on the 2 categories where your business spends the most each billing cycle from 6 eligible categories.
Cardholders simply pick the category they spend the most on, and watch the bonus points stream in.
2. Earn Rewards From Your Employee Spending
Another way to multiply the rewards you receive is by adding your employees as authorized cardholders under your account. As the primary cardholder, you will then earn additional rewards based on their spending. Encourage or require your employees to use the cards you issue them, rather than their personal credit cards or other forms of payment. Just be sure to implement clear guidelines for the use of employee cards and monitor their transactions carefully.
3. Combine Rewards From Your Business And Personal Credit Cards
One of the keys to earning the most valuable rewards possible from your business spending is to create synergies between your business and personal credit card use. Business credit cards can earn rewards in the same programs used by your personal credit cards, and often these balances can be combined.
For example, the hotel points or airline miles that you can earn from travel credit cards go into the same account as those earned from your personal credit card.
And when you use your small business credit card to earn points in a flexible rewards program such as Chase Ultimate Rewards and American Express Membership Rewards, then you can easily combine your rewards with those that you earned from your personal credit cards that belong to the same program.
4. Receive A Generous Sign-Up Bonus
Competition for new small business customers is so intense that the banks will offer you tens of thousands of points or bonus miles just for the opportunity to earn your business. So when you are looking for a new small business credit card, consider the size of the sign-up bonus offered, and make sure you can meet the spending requirement to earn those rewards.
5. Use Your Card for Everything
Make as many business purchases on the card as possible; without spending for things you don’t really need, of course. Some business cards will cap the amount of points you can earn. Keep track of those limits if they apply to your business, and consider using a different rewards card to earn as much as possible.
But there is a caveat here. Unless you get a low APR credit card, don’t spend more than you can afford to pay in full each month to avoid interest. Otherwise you’re paying for those rewards with potentially high interest rates. If you know you need to carry a balance, consider getting a card with a 0% introductory rate. Don’t worry; plenty of 0% business credit cards also offer rewards. (There are several listed below.)
For longer term financing, a small business loan is usually a better option.
Strategies For Maximizing The Value Of Rewards
While points and miles have value, how much value they have it’s always clear. Unlike credit card cash back rewards where you earn dollars, points may be redeemed in a variety of ways. You may be able to increase their value but using them strategically.
At the very least you should try to get at least 1 cent in value from each point or mile. But many rewards aficionados will try to get much more value than that.
Let’s say you’re purchasing an airline ticket for $350. If it takes 35000 points or miles to get that ticket, then you’re getting 1 cent in value per point or mile. (35000 x .01 = 350.)
But let’s say the airfare is still $350 but you get it for 20,000 miles or points. Then you’re getting 1.75 cents of value for each point. (350 divided by 20,000 = 1.75.)
There are multiple strategies for getting higher redemption rates on points. Among them:
Take advantage of special offers. Some hotel rewards programs will offer you a free night if you book a certain number of nights with points. For example,
- 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.
- 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.
Take advantage of transfer partners: Airlines can set (and change) the points needed for a ticket at any time. You may get a better deal by transferring points to airline or hotel loyalty programs (or to a different one than the one that appears on your credit card). This can provide significant savings if the other airline does not require as many points for a ticket.
Be flexible. If you have flexible dates, you may find great bargains by redeeming miles or points for off-peak travel.
If all of this feels like too much work, you can always choose a cash back credit card and use the cash as you choose. But if you’re a frequent traveler, either for business or leisure, travel can offer high redemption rates if you do your research.
Comparison Of The Most Popular Business Credit Card Rewards Programs
Here are some of the best business credit cards that offer travel rewards:
The Blue Business® Plus Credit Card from American Express
Earlier we mentioned the benefit of 0% intro APR offers, and this card has a solid one: 0% on purchases for 12 months from date of account opening. Earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership. Earn 2X Membership Rewards® 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.
It’s also worth mentioning that the annual fee is $0.
Ink Business Preferred® Credit Card
This card features an excellent welcome bonus for higher spenders: New Cardmember Offer! Earn 100,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening.. The rewards program also offers a higher rewards rate on certain purchases. 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. And the foreign transaction fee is $0.
Bank of America® Business Advantage Travel Rewards World Mastercard® credit card
This card features an intro APR of 0% for 9 billing cycles on purchases, a $0.00 and 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..
On an ongoing basis, you’ll also earn 1.5 rewards points for every $1 spent on all purchases and 3 points for every $1 spent for travel booked through the Bank of America® Travel Center..
Capital One Spark Miles for Business
With this card the bonus offer is 50,000 Miles once you spend $4,500 on purchases within 3 months from account opening. And the rewards program is simple and straightforward: 2 Miles per $1 on every purchase, everywhere..
It also offers up to $100 credit for Global Entry or TSA Precheck.
Delta SkyMiles® Reserve Business American Express Card
Delta frequent fliers can get a lot of value from this card, starting with the welcome offer. Limited Time Offer: Earn 110,000 Bonus Miles after spending $12,000 in purchases on your new Card in your first 6 months of Card Membership. Offer Ends 3/27/24. Your purchases earn Earn 1.5X miles on eligible transit, U.S. shipping, and U.S. office supply store purchases, plus all eligible purchases after you spend $150,000 in purchases on your Card in a year. Enjoy 3x miles per dollar on Delta purchases..
However, there is an annual fee of $650, so make sure you can derive enough value to offset the annual fee. If not, consider one of the Delta Skymiles business credit cards with a lower annual fee.
The Hilton Honors American Express Business Card
Welcome Offer: Earn 130,000 Hilton Honors Bonus Points after you spend $3,000 in purchases on the Hilton Honors Business Card within the first three months of Card Membership..
You can earn much higher than average rewards rates on certain purchases: 12X directly with hotels and resorts in the Hilton portfolio, 6X at U.S. gas stations, on U.S. purchases for shipping, on wireless telephone services purchased directly from U.S. service providers, on flights booked directly with airlines or with Amex Travel, on car rentals booked directly from select car rental companies, and at U.S. restaurants, 3X on all other eligible purchases..
If you take advantage of those offers, you can easily earn value that exceeds the annual fee of $95.
Keep in mind that most business credit card issuers will check the applicant’s personal credit score and good to excellent credit is required. At the same time, though, many of these cards are available to startups as long as you meet the issuer’s qualifications. In other words, you may be able to get one of these cards even if your business is new and not yet making money. (You will need income from other sources, though, which can household income.)
Most small business credit card issuers report payment history to business credit bureaus, which means you can use it to help establish business credit scores.
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