Key takeaways

  • Business credit cards that earn rewards — either points, miles or cash back — can help small-business owners boost their bottom line and earn additional helpful benefits.
  • When choosing the best rewards for your business, consider what your business spends the most on.
  • You’ll also want to consider the card’s interest rates, fees and additional card perks.
  • You don’t have to reinvest your rewards into your business. You can use them for your personal benefit, since business credit card rewards aren’t taxable.

When starting a business or even side hustle, a business rewards credit card can be among the money-saving tools to reach your entrepreneurial goals. But it’s important to develop a smart strategy to ensure you’re maximizing your rewards.

Your spending habits may be uniquely suited to earning credit card points, miles or cash back. If your business requires you to fly regularly, you’re primed for earning miles for flights. Or if you run a contracting business, you could be earning cash back on the building materials and supplies you buy.

You’re already spending money on your business. Why not earn some of it back? Let’s take a look at how.

Why small-business owners should use rewards cards

Using a dedicated business credit card makes sense for a lot of reasons. Keeping your business and personal expenses separate is key for tax season, and it also makes it easier to track your spending and manage your budget. Plus, using a business credit card responsibly helps to build your business’s credit history.

Not every business credit card earns rewards, but you should look for one that does. Here’s why.

  • Boost your bottom line. The points, miles and cash back that you can earn just by charging your regular business expenses to a rewards card are worth real money. A points-funded flight or cash back redemption can translate to hundreds of dollars you get to keep or invest in your business.
  • Perks for your business — and you. Aside from rewards, consider how else a credit card may help your business. For example, if you take frequent business trips, a card that offers airport lounge access or priority boarding can be a game changer. Perks like purchase protection and extended warranties can provide peace of mind if you’re making large purchases to invest in your business.

How to pick a credit card with the best rewards for your business

The first thing to know about choosing a business rewards card is that they aren’t one-size-fits-all. The best card for your business depends on your spending habits, business needs and entrepreneurial goals.

Here are a few things to consider:

  • Rewards type. First, think about which type of rewards could be most valuable for your business. If you do most of your spending on travel, 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. A welcome bonus can increase a rewards card’s value, at least in the short term. For example, you might be able to earn 50,000 miles or $500 in cash back if you spend a specific amount within the first few months of opening your account. But weigh the size of the bonus against what you’d have to spend to earn it. If you have to change your regular spending patterns to qualify for a bonus, it may not be worth it.
  • Card benefits. Rewards aren’t the only draw. Look for perks that can benefit your business — like travel credits, service memberships and purchase protections.
  • Interest and fees. If you don’t plan to pay your balance in full each month, you’ll want to check out the APR for any business card you’re considering. Also, factor in the card’s annual fee to determine how easily you could earn it back in rewards. Though many premium cards with lofty annual fees come with lots of perks, you should be sure that you’ll actually make use of them.

Can you redeem business credit card rewards for personal use?

You might not always want to use your credit card rewards to reinvest in your business. Maybe you want to accumulate some travel miles so you can book a dream vacation.

Since business card rewards are not taxable, redeeming points or miles for personal benefit won’t create any tax headaches. However, earning cash back can affect how much you’re able to deduct for business purchases.

And you could run into challenges if you’re running your business with a partner. You’d need to work out an agreement about how business rewards should be shared to avoid conflicts over points, miles or cash back.

How to manage rewards earned by employees

Employee card purchases are treated the same as purchases associated with the primary cardholder, which means they earn rewards, too. You can also simplify expense tracking and record keeping by having all purchases charged to the same account. Many issuers allow you to add employees for no additional fee.

If you’re considering adding employees to your business card rewards account, consider whether you want to set limits on where the card can be used or how much can be charged. Most business cards come with built-in features that let you assign spending limits to individual employee cards. If your card lacks this feature, you may want to create a written policy for card use, so your employees understand what is and isn’t allowed.

How to make the most of your business credit card rewards

Making the most of a business rewards credit card starts with having a plan. Here are concrete steps you can take to determine your rewards strategy and maximize your rewards earnings:

  • Analyze your business spending. Before you start comparing rewards cards, take a close look at your typical business spending in a given month. Reviewing bank statements can help you figure out where you tend to spend the most money, which can help you target the right rewards card.
  • Determine the rewards and perks you’d like to earn. You’ll get the best return on your investment by choosing a card that offers rewards that fit your goals. Do you want to put money back in your pocket or save on travel? If your small business requires a lot of travel, a top business travel credit card may make the most sense. On the flip side, if you don’t travel frequently, you may not take advantage of travel card perks. Instead, a business cash back card might be more useful.
  • Weigh the benefits of bonus categories. Some business rewards cards offer a flat rewards rate, like 2 percent cash back on all purchases. Others offer tiered rewards or rewards in rotating categories, maybe 3 percent on gas and 1.5 percent on everything else. If you want to keep things simple, then you might choose a flat-rate rewards card. If you’re hoping to strategically spend to earn the most rewards possible, a card that offers bonus categories might be a better fit.
  • Think about redemption options. Maximizing rewards doesn’t just mean earning them — you need to consider how you’ll use them. Some redemption options offer more value than others. For example, you’ll typically get more value when redeeming points or miles for travel than you would for gift cards. And you may be able to transfer rewards to partners to further maximize what you earn.

Take full advantage of lesser-known business card perks your card may offer, such as free employee cards, accounting software, travel insurance and consumer protections. And finally, don’t miss out on the possibility of a welcome bonus that may score you additional points, miles or cash back.

The bottom line

If you’re interested in growing your business or side hustle, a small-business credit card that offers rewards could be a stepping stone for reaching your goals. Aside from earning rewards, they can make managing your business easier. What’s most important is taking time to find the right card that aligns with how your business spends and how you plan to use the rewards you’ve earned.