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.
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.
Business credit cards with rewards typically have an annual fee. You’ll need to weigh this cost against the benefits of using these reward points.
Product Discounts
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
While most business travel is still on hold, access to shared office spaces can be a great feature if you are intending to resume some degree of socially-distanced business travel now or in the future.
Cash Rebates
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? When business travel resumes, do you anticipate that you will 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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