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Business credit card rewards programs may help support how a business manages company spending, but for some, they could seem too complex to track or optimize. A cash back business credit card may offer a more straightforward, more predictable way to earn rewards.
Understanding how business cash back programs work may help your business choose the right rewards strategy for your business spending.
What Is Cash Back and How Does It Work?
Cash back is a reward your business may earn from eligible spending, including as a statement credit, gift card, or deposit into a bank account. Some rewards may only be redeemed after you reach a minimum amount, while others can be used as you earn them. They may also be issued at set times, such as monthly or quarterly.
Depending on the business cash back program, rewards could fall into two categories:
- Flat rate: You may earn the same cash back amount on all eligible purchases, potentially making it easier to track earnings.
- Category-based: You may earn different cash back percentages based on your spending in specific categories. For example, you may receive higher cash back on business expenses like advertising services, but you may receive a lower rate for transportation charges.
Why Might Cash Back Be More Predictable Than Other Rewards Programs?
Business cash back programs may offer more predictability compared to points or travel rewards cards. If you have a flat-rate cash back business credit card, it may be possible to estimate how much cash back may be earned based on your planned purchases and expenses.
For example, if you spend $300,000 in qualifying annual business expenses and your credit card earns 2% cash back, you could earn $6,000 in rewards each year. Even if you have a credit card with category-based earnings, it may still be possible to estimate potential cash back earnings based on everyday business expenses.
Cash back rewards may also help simplify reporting, as these credits could appear directly on your statements, which may help make these transactions easier to reconcile.
Cash back programs may be particularly relevant for businesses that:
- Have consistent, high-volume operating expenses
- Prefer straightforward, easy-to-track rewards
- Want a predictable way to offset costs rather than manage variable redemption options
How You Can Get More Value From Your Business Spending
One reward strategy for business spending may be to use a credit card with business cash back programs that offer higher earnings for categories your business regularly uses. For example, if your business spends the most on business travel and office supplies, you may want to choose a card that offers higher cash back in these categories. If there is more than one credit card that offers higher cash back on your top spending categories, you may consider using certain credit cards based on specific cash back offerings.
Business cash back programs may offer more predictability compared to points or travel rewards cards.
If your business spending is evenly distributed across a number of categories, it may be helpful to consider a flat rate business cash back program. This could help streamline your cash back strategy and support ongoing management.
What to Look For When Choosing a Cash Back Business Credit Card
When doing a cash back business credit card comparison, it may be helpful to review more than the cash back rate earned. Consider also reviewing:
Annual Fee
Premium cash back business credit cards may come with annual fees. These cards may also offer benefits like travel insurance and partnerships with retailers in addition to the cash back program.
Spending Limits
Some cash back programs that offer higher rates on specific spend categories may set a limit on how much a business may earn within a quarter or on an annual basis. Under this scenario, a business might earn a higher cash back rate on certain categories up to the limit and then the regular rate on any additional spending.
For example, a credit card may offer 5% cash back on purchases at office supply stores, up to $6,000 per year, then 1% after that amount. If a business spends $10,000 on office supplies each year, it may be helpful to calculate the cash back on actual spend to compare it to other offerings.
Redemption Options and Minimums
Although some business cash back programs distribute rewards as credit statements, others may offer additional options like gift cards and cash deposits. Some rewards programs may also require a business to have a minimum balance before redeeming cash back, while others may offer redemptions each statement period.
Employee Card Management and Controls
The ability to issue and manage employee credit cards in real time may be beneficial. It may be helpful to evaluate features that offer the tools you want without adding more tasks to your plate. Credit cards that may integrate with your business's expense management platform or enterprise software could help reduce the time spent on reconciliation.
Aligning Your Rewards Strategy to Your Financial Goals
Business cash back programs may be used to help support financial goals. Part of the appeal of leveraging cash back programs is that they may be more straightforward to track, since a business may earn a percentage based on spending that could help offset business costs.
Understanding your top spending categories and potential cash back rewards may help inform decisions about which cash back business credit card fits your strategy.
Consider Amex Corporate™
One connected ecosystem. Full program control. Amex Corporate™ brings together Corporate Cashback® Cards, program management, and expense workflows in a single, unified platform.
The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
