There’s more to maximizing credit card rewards than just paying for business expenses with plastic. The first step: Find a small business credit card that offers top rewards on the goods and services your company most frequently purchases. We’ll show you how to pick that perfect card and other ways to maximize credit card rewards.
One option for excellent small business credit card rewards is the Chase Ink Business Cash℠ card. You can earn up to 5% cash back on purchases as well as an introductory cash bonus of $500 when you spend $3,000 in the first three months after account opening.
Follow these seven steps to maximize your small business credit card rewards:
1. Examine Expenses to Find the Right Card Rewards
The first and biggest mistake small business owners make is choosing the wrong small business credit card for their spending. Wrong can mean you chose a card with a high annual fee when a no-fee card would have been more rewarding. It could mean you chose a card that offers its highest rewards on airfare when your company’s travel budget is tiny.
It’s time to take a hard look at the expenses your firm typically puts on a credit card—and those you could put on a credit card but don’t. It will show whether you can spend enough to earn an introductory reward on a new card, whether your spending can offset the cost of an annual fee, and what kind of rewards bonus categories best suit your business.
Here’s what to look for when examining your spending:
Examine Credit Card Rewards Requirements
Determining how much you spend in a month and what you spend it on will go a long way toward helping you choose the best business credit card for your company. Look at your budgeted spending and which types of goods and services you most frequently purchase. This strategy works even if you’re looking for business credit cards for startups.
Pinpointing how much your company spends each month helps in two ways when it comes to choosing a credit card and maximizing credit card rewards. Your budgeted spending could show whether:
- You can realistically meet the spending requirements to earn an introductory reward.
- Your spending justifies paying the annual fee some cards charge.
You’ll need to make three calculations to determine potential rewards:
Calculate the Potential Introductory Bonus
Here’s how the introductory reward math works for a few of the best credit card rewards programs:
- Capital One® Spark® Cash for Business: Earn a $500 cash bonus when you spend $5,000 in the first three and earn $1,500 when you spend $50,000 in the first 6 months of your account opening. Your firm will need to spend on average $1,666 a month on your card to earn the bonus ($5,000/3=$1,666.67).
- American Express Business Platinum®: Earn 50,000 Membership Rewards points after you spend $10,000 within the first three months. Earn an additional 50,000 points after you spend another $15,000, also within the first three months. Your firm will need to spend on average $6,666 a month to earn the full bonus ($20,000/3=$6,666.67).
Calculate Your Annual Fee Breakeven Point
You’ll need to solve another equation (or two) to determine if the annual fee is worth it:
- Chase Ink Business PreferredSM: Charges a $95 annual fee. To break even, you’ll need to spend ~$3,200 annually on travel, shipping, advertising, and/or on internet, cable, and phone services. Those categories pay three points per dollar spent ($3,200 x 3 points x $0.01 value per point = $96 in rewards).
- Capital One® Spark® Miles for Business: Charges a $95 annual fee, waived the first year. It pays unlimited 2x miles per $1 on all spending. To break even in the second year and beyond, you’ll need to spend $4,750 annually ($4,750 x 2 points x $0.01 value per point = $95 in rewards).
Calculate the Annual Spend Requirement
Go one step further and compare the Capital One® Spark® Miles for Business with the Capital One® Spark® Miles Select for Business, which charges no annual fee and pays 1.5x miles on all spending. Unless you spend more than $19,000 annually, you’re better off with the Capital One® Spark® Miles Select for Business.
Here’s how the math works:
- Capital One® Spark® Miles for Business: $19,000 in annual spend x 2 miles x $0.01 value per mile – $95 annual fee = $285 in rewards
- Capital One® Spark® Miles Select for Business: $19,000 in annual spend x 1.5 miles x $0.01 value per mile = $285 in rewards
Determine The Best Type of Credit Card Rewards
If the credit card you choose offers bonus rewards on certain categories of spending, you should make sure your business frequently makes purchases in those categories, which typically offer returns of 2% to 5%, either in the form of cash back or points/miles.
The bonus rewards categories most frequently found on small business credit cards include:
- Advertising on search engines and social media sites
- Cable, Internet, and phone services
- Dining: May include sit-down and fast-food restaurants, cafes, coffee shops, bars, juice bars, vending machines, and restaurant delivery services like Grubhub and Postmates
- Office supplies
- Travel: May include airlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, passenger trains, buses, taxis, limousines, ferries, tolls, parking lots, and garages
When looking to maximize small business credit card rewards, eliminate as options credit cards that don’t offer rewards in your highest-spending categories. If your business doesn’t spend heavily in any one category, consider a credit card that pays fixed-rate rewards on all spending, meaning there are no bonus categories to track. You could earn 2% cash back or 2x miles or points on all purchases with a fixed-rate card.
If your firm has a big travel budget, but also has a fair amount of general spending not covered by bonus categories, open two cards. One should offer big bonus category rewards, while the other should offer fixed-rate rewards. That could boost your overall return. Compare the small business credit cards in the Fit Small Business Credit Card Marketplace.
2. Find the Best Introductory Rewards
Introductory rewards should be a major deciding factor that will allow you to maximize small business credit card rewards. Signup bonuses make your first few months of card ownership the most lucrative. Introductory rewards may be worth $100 to $1,000+, and you may be required to spend $500 to $3,000+ over three to six months to earn the bonus.
Look for introductory credit card cash-back rewards or credit card points rewards that you can earn without changing your existing business card spending habits. Determine if the card’s introductory rewards are worth it to you by looking at spending requirements and subtracting the award value from any annual fee.
Take these two steps to determine if the introductory credit card rewards are right for you:
Learn the Introductory Credit Card Rewards Spending Requirements
To earn introductory credit card rewards, you may be required to spend $500 to $3,000+ within the first three months of card ownership. In general, the larger the bonus, the more you’ll be required to spend. To maximize credit card rewards, don’t choose a card that requires more spending than you can afford.
Here are two examples of what issuers require of cardholders to earn a credit card rewards bonus:
- Chase Ink Business PreferredSM: Earn 80,000 Ultimate Rewards points when you spend $5,000 within the first three months of account opening. Rewards points may be worth $1,000+ when redeemed for travel through Chase’s online travel portal or transferred to airline or hotel partners.
- Bank of America® Business Advantage Cash Rewards Mastercard: Earn a $300 statement credit when you make at least $3,000 in net purchases within 90 days of your account opening- with no annual fee and cash rewards don’t expire.
Calculate the Rewards Value Minus an Annual Fee
A smaller bonus on a card that charges no annual fee may be more valuable than a larger bonus on a card that charges an annual fee. You’ll have to do some quick back-of-the-envelope math to find the better deal.
Compare these two introductory rewards offers:
- American Express Business Platinum®: Earn 100,000 Membership Rewards points within your first three months of account opening if you make $25,000 in purchases. Points are worth $1000+ in travel when redeemed through American Express or its airline and hotel travel partners. Pay a $595 annual fee (see rates & fees). ($1000 bonus – $595 annual fee = $405 total value.)
- Chase Ink Business CashSM: Earn $500 cash back after you spend $3,000 within your first three months. You’ll pay no annual fee. ($500 bonus – $0 annual fee = $500 total value.)
Making a value judgment may be more complex than subtracting the bonus amount from the annual fee, however. You may also want to consider the value of a card’s other benefits in your calculations, like airport lounge access, annual travel credits, or reimbursement for airport screening programs.
Examine Non-Traditional Credit Card Rewards
Most small business credit cards that offer introductory rewards offer cash or points/miles in exchange for meeting early spending requirements. But some cards offer more unique arrangements, like free business software subscriptions in lieu of a cash bonus. These types of bonuses are best for businesses that already use the services included in the offer.
Here’s an example of a non-traditional credit card rewards bonuses:
- Brex: Receive statement credits and discounts on purchases of Amazon Web Services, Google Ads, WeWork, Carta, Salesforce, Twilio, SendGrid, Zendesk, Instacart, HubSpot, and Caviar. Earn as much as $25,000 in credits and discounts during the first year of card membership.
This offer is potentially much more lucrative than traditional introductory rewards, but only if your business can take advantage of them.
3. Examine Credit Card Rewards Programs
Credit card rewards programs offer either cash back or points/miles. Choose points or miles programs only if you travel frequently. You’ll earn either fixed-rate rewards up to 2% or tiered rewards up to 5%+ on bonus categories like travel or office supplies. Choose the program that fits your company’s spending needs.
Determine which type of credit card rewards is right for you by looking at the following:
Cards that Offer Credit Card Cash-Back Rewards
Cash-back credit card reward programs are fairly straightforward. Earn back a percentage of the amount you charged to the card. Cash-back rewards are best for owners who value a rewards program with straightforward redemption values of 1% to 5% and few restrictions.
Most cards allow you to redeem your cash back for:
- A statement credit or a deposit into your bank account
- Gift cards
- Merchandise available through the issuer’s online shopping portal
Depending on the card, you may either be able to redeem cash-back rewards at any time, or only when you can meet minimum redemption thresholds, typically starting at $25.
Cards that Offer Credit Card Rewards Points
Points rewards programs are generally more complex than cash-back rewards. You’ll typically earn 1x to 5x points per dollar spent, but the redemption value of points/miles may vary based on how you redeem them. Each point/mile is typically worth between 0.5 cents and 2.5 cents.
Since points redemption is most often associated with travel, a points or miles card is best for a business owner who flies or stays in hotels frequently. Points may be redeemed for:
- Travel through the issuer’s online booking center
- Gift cards
- Statement credits
You may get more value out of redeeming your points for travel. For example, points are worth 1.25 cents each on the Chase Ink Business PreferredSM card when redeemed for travel through Chase and 1 cent each for other redemption options. Just remember, when you redeem points for travel, you may have to navigate blackout dates or seat restrictions.
Some cards also allow you to transfer your points to an airline or hotel partner, where you may be able to increase your redemption value. Million Mile Secrets, for example, found these deals when transferring American Express Membership Rewards points to:
- British Airways: Fly from Boston to Dublin for 26,000 British Airways Avios points on an award ticket that normally costs ~$983. Points value = ~3.7 cents each.
- Air Canada: Fly one-way business class from San Francisco to Sydney on Air Canada’s Star Alliance partner United Airlines for 80,000 Air Canada Aeroplan miles on an award ticket that normally costs ~$5,086. Points value = ~6.3 cents each.
You can increase your redemption value by using transfer partners, but you’ll need patience and a bit of knowledge about how frequent flyer programs and card partners work. Redeeming points through a card partner is best for owners who travel for pleasure and are flexible about where and when they travel.
This redemption option isn’t, however, for business owners who value simplicity. In the example above, you can’t transfer Membership Rewards points directly to United because it isn’t an American Express partner. But United and Air Canada both belong to one of the three major airline alliances, Star Alliance, which allows 1:1 point transfers between carrier partners.
How Fixed-Rate Credit Card Rewards Programs Work
Fixed-rate credit cards offer the same reward for all spending. Both cash-back credit cards and points credit cards offer fixed-rate rewards. You’ll typically earn between 1% and 2% on all spending with a cash-back card and between 1x points and 2x points with a points card. Fixed-rate rewards credit cards may or may not carry an annual fee. Many offer an introductory bonus.
Here are two examples of fixed-rate business rewards credit cards:
- Chase Ink Business UnlimitedSM: Earn 1.5% cash back per dollar spent on all purchases. Pay no annual fee. Earn a $500 introductory rewards bonus after you spend $3,000 within your first three months of card ownership.
- American Express Blue Business® Plus: Earn 2x Membership Rewards points on all purchases up to $50,000 each year, and 1x points on all additional purchases. Pay no annual fee (see rates & fees). There is no introductory rewards bonus.
How Bonus Category Credit Card Rewards Programs Work
Business rewards credit cards that offer category bonuses pay a higher rate in some categories of spending than in others. You’ll typically earn between 2% and 5% in bonus categories with the best cash-back business credit cards and between 2x and 5x with a points card. Non-category spending typically earns just 1% cash or 1x points.
Typical business credit card bonus categories include:
- Advertising on search engines and social media sites
- Office supplies
Cards may offer category bonuses in multiple categories and at multiple earning rates. You may earn 5% cash back on office supply spending and 3% cash back on gasoline purchases on the same card. Watch out for spending caps of between $25,000 and $50,000+ on bonus categories. Once you hit a cap, you’ll typically earn 1% or 1x on additional spending.
4. Watch Out for Spending Caps
Some small business rewards credit cards may set spending caps on bonus category rewards. Once you spend between $25,000 and $50,000+ in a bonus category, your rewards may drop from as high as 5% to as little as 1%. This could limit your ability to maximize credit card rewards.
Here’s what to do when you hit a spending cap:
Alternatives When You Hit a Rewards Spending Cap
If your business spends less than $25,000 annually in bonus categories, spending caps will not prevent you from maximizing credit card rewards. But if you regularly spend $25,000+ in bonus categories, consider one of these two types of cards as a backup:
- Bonus category small business credit card: Find another card that offers similar category bonuses and switch your spending to it when you hit the spending cap on your primary card. You may be able to earn up to 5% on your favorite spending category on an additional $25,000 to $50,000+ in annual spending.
- Fixed-rate small business credit card: Use a fixed-rate card as an alternative once you hit a spending cap. You’ll see a 1.5% to 2% return on your spending instead of the 1% your primary card will pay after you hit the cap.
5. Consider Annual Credit Card Spending Bonuses
Another way to maximize credit card rewards is to find a card that rewards you not just for spending, but for spending above a certain amount annually, typically between $15,000 and $75,000. When you reach the annual spending threshold, you may receive bonus points or other rewards.
Some common annual credit card spending bonuses include:
- Bonus points or miles
- Free hotel stays
- Complimentary status upgrades at hotels and airlines
- Free or discounted airline companion tickets
Annual spending bonuses are most frequently found on business credit cards for travel. Since the bonuses are heavily travel-focused as well, you’ll only maximize your credit card rewards in this case if you frequently fly or stay in hotels. Expect to pay an annual fee of $95 to $450 on cards that offer annual spending bonuses.
How to Earn Credit Card Rewards Spending Bonuses
Here are two examples of small business rewards credit cards that offer annual spending bonuses:
- Hilton Honors American Express Business Card: Spend $40,000 in a calendar year and earn Hilton Honors Diamond status through the end of the next calendar year. Diamond status enables you to get a fifth night free on reservations, room upgrades, lounge access, and a free breakfast for two.
- CitiBusiness/AAdvantage Platinum Select World Mastercard: Spend $30,000 during a membership year and earn a $99 domestic economy companion certificate on American Airlines. When you purchase airfare for one round-trip domestic coach flight within the U.S., the certificate allows you to purchase a second ticket for $99 plus taxes and fees.
6. Make Employees Use a Small Business Credit Card
If your business’ credit card policy allows employees to use their personal credit cards to pay for business expenses and then file an expense report for reimbursement, you won’t maximize your credit card rewards because you’re missing out on cash back or points.
Instead, consider asking your issuer for employee credit cards that you can control. Any cash-back or points rewards can be directed to the master account. Major card companies like Chase will:
- Issue up to 75+ employee small business credit cards
- Charge no annual fee on employee cards (with the exception of some cards issued by American Express)
- Allow employee spending controls
- Offer itemized spending breakdowns per employee card
All employee cards earn the same rewards as the account holder’s card, which means you’re not sacrificing credit card rewards by letting an authorized user make a business purchase.
7. Pay Off Your Balance Every Month
One of the worst ways to maximize your credit card rewards is to carry a balance. The typical credit card APR is 17%+. The interest on any balance you carry over—for even one month—may eat away most the value of any rewards you earn.
If, for example, you carried a $1,000 balance from one month to the next on a card that charges 17% APR and earns 2% rewards, you would:
- Earn $20 in rewards
- Incur $14.17 in interest charges
That leaves you with just $5.83 in remaining rewards on $1,000 in spending, or an effective earning rate of ~0.6%. If financing your business requires you to regularly carry a credit card balance, a business rewards credit card isn’t right for you. Instead, open a low interest credit card with an ongoing APR of 14% or lower. You may also consider a card that offers a 0% APR introductory period on purchases and balance transfers.
Frequently Asked Questions (FAQs) on Maximizing Credit Card Rewards
If you still have questions about maximizing credit card rewards, here are some of the most frequently asked questions. If you don’t see an answer to your question, visit the Fit Small Business Forum and post a question there.
Some common questions about maximizing credit card rewards are:
Which Credit Card Has the Best Rewards Program?
The best credit card rewards programs are the ones that best fit your business. The ideal choice is a card for which you can qualify that gives you the highest rewards for the types of purchases your business most frequently makes. We’ve put in hours of research to determine the best small business credit cards.
How Do I Get More Points on My Credit Card?
When cardholders ask how to maximize credit card rewards, they’re really asking how they can earn more points. Earn more points by spending more than you normally would (which we don’t advise) by using a credit card instead of a debit card, or by ensuring you’re getting the best rewards for bonus category spending.
How Do You Benefit from Credit Card Rewards?
The best credit card rewards programs return 2%+ of what you spend in the form of cash back or points and miles you can use to redeem for travel or other goods and services. You can think of card rewards as a rebate that will save your company money on all of its expenses.
Small business owners can maximize their credit card rewards with a card that offers introductory rewards of $100 to $1,000+ and ongoing rewards of 2%+ for the types of purchases their business most frequently makes.