Small-Business Owner’s Guide to Credit Card Rewards
When starting a business or side hustle, a business rewards credit card can be a money-saving tool.
Consider this: despite credit card companies revamping rewards programs to make them more pandemic-friendly, 31% of Americans didn’t redeem any rewards in 2020.
That’s money left on the table, and in business, every dollar counts. Developing a smart strategy for maximizing your credit card rewards can help you reach your entrepreneurial goals.
As a business owner or side hustler, your spending habits may be uniquely suited to earning credit card points, miles or cash back.
For example, if your business requires you to fly regularly, you’re primed for earning miles on flights. Or, if you run a contracting business, you could be earning cash back on the building materials and supplies you buy.
Think of it this way: You’re already spending money for your business. Why not earn some of it back?
Why small-business owners should use rewards cards
When you’re running a business or side hustle, every choice you make can affect the bottom line. Getting a rewards card can be a smart business decision for several reasons.
Here’s a closer look at some of the top benefits of having a business credit card.
- Organization: Having a dedicated business credit card can make it easier to organize spending in one place. You can charge all business purchases for the month, then make one payment from your business checking account to cover it.
- Separating personal and business expenses: Mingling personal and business spending can lead to headaches when it’s time to file taxes. Charging deductible business expenses to a separate credit card makes tax filing easier.
- Expense tracking and budgeting: Maintaining a business budget is just as important as having a personal budget. Using a credit card to charge business expenses takes the guesswork out of tracking spending, and you can see at a glance where your money is going. Some business credit cards even come with expense tracking software to help.
- Purchase protection: Purchase protection can provide some peace of mind, especially if you’re making large purchases to invest in your business. This card benefit can help with replacement or repair costs if something you buy is stolen, lost or damaged.
- Rewards: Credit card rewards can be a great money-saver for your business. For example, if you’re earning travel rewards, you can use them to book discounted or even free flights. With cash back, you can apply that to your statement balance or make other business purchases.
Another advantage of business rewards cards is that they’re not exclusive to certain types of businesses. Virtually any kind of business can benefit from using rewards credit cards. It’s all about choosing the right card for your business.
For example, say you run a landscaping business. In that case, choosing a card that pays you cash back on gas and other purchases could help you earn money back when fueling up vehicles and equipment or stocking up on other supplies. Or say you run an online subscription box business from home. You could earn rewards with a card that pays you points or cash back on internet services and shipping.
How to pick the best rewards credit card for your business
The first thing to know about choosing a rewards credit card for your business is that they aren’t one-size-fits-all. The best card for your business will depend on your spending habits, needs and goals.
As you weigh business credit card options, here are some things to consider:
- Rewards type: First, think about what type of rewards would be most valuable for your business, based on how you spend. If you do most of your spending on travel, for instance, then miles or points might be preferable to cash back. The key is choosing a card that offers the type of rewards you’re most likely to use.
- Introductory bonus: An introductory bonus can increase a rewards card’s value, at least in the short term. For…
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