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Should you get cash back or travel credit card for your business?

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Many small-business owners get a lot of value out of their business credit cards — whether they’re using their cards to fund business growth or earn rewards on everyday business expenses. Freelancers, entrepreneurs and brick-and-mortar retailers can all use business credit cards to their advantage, especially if they choose a small-business credit card that offers the best rewards for their growing business.

In most cases, this means deciding between a cash back credit card and a travel credit card. The top business credit cards generally offer either a percentage of cash back on every purchase or the opportunity to earn points and miles that can be redeemed for travel expenses.

If you’re trying to choose between a cash back vs. travel business card, it’s helpful to understand the pros and cons of both cash back and travel rewards — as well as the best business credit cards in each category.

Here’s what you need to know.

Cash back for business

Many small-business owners can benefit from earning cash back. Cash back is an easy rewards currency to understand, and it puts real dollars back into your pocket. However, its value has a preset ceiling.

Here are some of the pros and cons of cash back credit cards:

Pros

  • Flexible earning potential: In most cases, cash back credit cards allow you to earn rewards on more types of purchases than travel cards. Choose a cash back card that offers rewards that complement your business type, or apply for a flat-rate cash back rewards card that offers the same earning potential on every purchase. Since you won’t be limiting your highest earning potential to travel purchases, you might have the opportunity to earn more rewards on everyday business expenses. Plus, many business cash back credit cards offer welcome bonuses that can be extremely lucrative — especially for small-business owners who are looking for extra cash to put towards business growth.
  • Flexible redemption potential: Cash back credit cards generally offer more flexible redemption options than travel credit cards. In most cases, you can redeem your cash back rewards for statement credits, online purchases, gift cards and more. This is especially beneficial if you want to reinvest your rewards in your business. While travel credit cards may offer similar redemption options, you may not get as much value out of your travel rewards if you redeem them for non-travel purchases.

Cons

  • Limited perks: Cash back cards can be relatively light on additional perks and benefits compared with travel credit cards. You might get access to some services, but you likely won’t get the same dollar value as you would from airport lounge access, travel credits, and other premium travel perks.
  • Flat value: With cash back, what you see is what you get. Typically, there’s no way to redeem $50 of cash back for $75, for example. As we’ll discuss later on, travel cards offer the chance to score a deal that boosts your rewards value.

Best cash back cards for business

  • Ink Business Cash® Credit Card: 5 percent cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year; 2 percent cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year; 1 percent cash back on all other purchases.
  • Capital One Spark Cash Plus: 5 percent cash back on hotels and rental cars booked through Capital One Travel. 2 percent cash back on all other purchases.
  • Ink Business Unlimited® Credit Card: 1.5 percent cash back on all purchases.

Travel points or miles for business

Many of today’s top travel credit cards for businesses can help small-business owners save money — but just like cash back credit cards, travel cards have both benefits and drawbacks. If you don’t travel very often, you may be unable to take advantage of the rewards and perks these cards offer. Likewise, if you choose a business travel credit card that reserves its highest reward potential for purchases made with a specific airline or hotel, you could be limiting your reward-earning opportunities.

Here are the pros and cons of business travel credit cards:

Pros

  • High rewards potential for travel purchases: If you make a lot of travel purchases, you could get a lot of value out of a travel credit card. Many travel credit cards offer as much as 5X rewards on travel purchases, giving you plenty of points and miles potential. Plus, some business travel credit cards offer sign-up bonuses that are valuable enough to cover the cost of your next flight.
  • Valuable travel perks: Points and miles aren’t the only perks travel credit cards offer. Many of the best travel, airline and hotel credit cards offer additional benefits, from travel insurance to free companion flights. Whether you’re hoping to save money on checked bags or take advantage of hotel upgrades, most travel credit cards offer a few extra perks that could make your trip less expensive and more comfortable.

Cons

Limited redemption options: Most travel credit cards make it easy for you to redeem your rewards for travel purchases. However, other redemption options could be limited — or, in many cases, lower-value. Make sure you understand all of your available redemption options before you apply for a business travel credit card.

Best travel credit cards for business

  • The Business Platinum Card® from American Express: 5X Membership Rewards points on flights and prepaid hotels on amextravel.com. 1.5X points on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year. 1 point per dollar on all other purchases
  • Ink Business Preferred® Credit Card: 3X points on the first $150,000 spent on travel and select business categories each account anniversary year. 1 point per dollar on all other purchases
  • Capital One Spark Miles for Business: 2X miles per dollar on all purchases

Which rewards currency is best for your business?

If you’re trying to decide between a cash back and a business travel card, start by asking yourself how much business travel you plan on doing in the next year.

If you frequently travel for business, a travel credit card could help you save money on flights and hotels. Some business travel cards even offer perks like TSA PreCheck membership credits or airport lounge access. So keep that in mind before you apply, and look for a business travel credit card that can both help you save money and make your travel more comfortable.

If you don’t often travel for business, a top cash back credit card is probably your best choice. Cash back is right for you if you’re looking to earn rewards on everyday business purchases or if you want the flexibility to redeem your credit card rewards for statement credits, Amazon and PayPal purchases and more.

Many business cash back credit cards even let you redeem your cash back rewards for travel purchases — which means you could use your cash back rewards to save money on an upcoming business trip. In this case, the cash back card offers the best of both worlds.

The bottom line

If you’re a small-business owner who can’t decide between a cash back vs. travel business card, keep in mind that cash back credit cards are often more flexible than travel credit cards. And, unless you do a lot of business travel, you’re likely to get more value out of a top cash back credit card.

Written by
Nicole Dieker
Personal Finance Contributor
Nicole Dieker has been a full-time freelance writer since 2012—and a personal finance enthusiast since 2004, when she graduated from college and, looking for financial guidance, found a battered copy of Your Money or Your Life at the public library. In addition to writing for Bankrate, her work has appeared on CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker spent five years as writer and editor for The Billfold, a personal finance blog where people had honest conversations about money. Dieker also teaches writing, freelancing and publishing classes and works one-on-one with authors as a developmental editor and copyeditor.
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