My first exposure to a rewards program was probably when my mother used to shop at a particular grocery store so she could get “Green Stamps," and redeem them for free household products like dishes and furniture. I signed up for my first frequent flyer program in 1981 to earn miles for free flights. Since then, most companies who use business credit cards expect to earn some type of bonus on all their spending as they pay their bill each month.
Business credit cards with rewards typically have an annual fee. ... You need to weigh this cost against the benefits of using these reward points.
As a growing business, there is an expanding list of rewards that can be earned with many business credit cards. In this massive rewards industry, companies need to determine which benefits are best for them and therefore which card is optimal for them to use. Rewards typically fall into these categories:
Earning Points or Miles
These can be earned from business credit cards with rewards usually based on a multiplied version of how much you spend. They can be used for free trips or first-class upgrades. Every other year, I use my points to fly my family for vacation to an exotic location in business class.
Other benefits business credit cards offer make the trip to the airport easier by getting through security faster with TSA PreCheck or making the wait more comfortable with access to an airport lounge.
With these cards, you may also be able to bypass the insurance sales pitch at the rental car counter because you know you are covered. Upon arriving at your destination, the business card may entitle you to special upgrades or free nights at participating hotels.
Another benefit can be a concierge service that can help when you are on a business trip to find the perfect restaurant or event tickets. Some business credit cards also help you avoid foreign transaction fees while traveling in other countries.
Some business credit cards offer one-time annual discounts on computer technology or airline tickets. If you already make these types of purchases every year, this can be a real benefit.
Access to Shared Office Spaces
This can be a great feature if you travel and need office space in other parts of the country to meet with clients.
Maybe you're interested in business credit cards that offer cash rebates based on your company's spending. Cash rebates can come in the form of a statement credit or a cash check.
The best part is that these rewards from business credit cards are not usually considered income, but a discount by the IRS, so they are not generally taxable. (Talk to your accountant for specific advice for your business.)
Business credit cards with rewards typically have an annual fee. Like with every other business decision for a growing company, you need to weigh this cost against the benefits of using these rewards.
Will your company use the benefits that particular card offers? If one of the business credit card rewards is a discount from a specific computer manufacturer or one on an airline, will you use it? Do you stay at the hotels where your rewards allow you upgrades or free nights? Do you travel enough that you will use the free shared office space?
Remember: Perks are only valuable when you use them.
Read more articles on credit-card financing.
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