One of the major perks of owning your own business is the ability to rack up credit card rewards. Since small business owners have been known to rack up tens of thousands of dollars per month in charges for anything from inventory to payroll, the ability to earn rewards quickly is easily done. The question that many small business owners have to ask themselves is which rewards are right for them and it is worth their while to take an interest rate or a credit limit that isn’t exactly what they need to get the rewards they want. Let’s take a closer look and see.
One of the most popular business card perks is free air miles. An air mile card works by allowing the user to earn one air mile for every dollar spent on their card. The air miles are usually affiliated with one particular airline or a combination of airlines that all use the same air mile program. While this program might sound great on the surface, there are a few pitfalls you need to watch out for. In many cases, it takes a significant amount of air miles to earn a free flight. Most programs charge 25,000 air miles for a one-way, domestic flight. Of course, if you are spending upwards of $25,000 a month on your business card, this isn’t an issue, but if you are only spending $1,000 a month, this perk isn’t very practical. You also need to look out for an expiration date on your miles since they may expire before you earn enough to actually use them. Finally, you also need to check to see what restrictions are placed on your miles like what kinds of seats you can book, if there are blackout periods and other fine print that can restrict your freedom to use them.
A second popular reward option for many small businesses is cash back. With these cards, pioneered by Discover, you receive a certain percentage of your purchases back at the end of the year. While this refund amount varies from card to card, it is usually around 2 percent. Again, the practicality of this reward is directly tied to how much you use your card. If you are planning on using your small business credit card a great deal, than this is a reward that could really pay off. Otherwise, it may only be for chump change. As far as the fine print goes, make sure you understand which purchases go towards the reward. Some cards may only offer the cash back rewards on some purchases and not others. Regardless of which perk card you choose, it is always a good idea to ask as many questions as possible since very few of them are completely honest with you when it comes to paying out their various perks.
If you play you cards right, you can take advantage of your cards perks every year, and who knows, you might get a few free flights or a sweet cash back bonus at the end of the year!
