The hot question here is why you should use a cash back credit card. What’s so special about it? Whether you are on the top of your game with revenue or struggling to get through the next day, the bottom line is that your business needs a cashback credit card.
Choosing a credit card that earns rewards is important for scaling up your startup or small business. In addition, selecting a card with cashback rewards can add to your company’s investments. In other words, it’s spending and earning money simultaneously.
Well, you heard enough. So let’s dive deep into this article to learn more about the extra benefits a cashback credit card offers.
Table of Contents
6 Benefits of using a cashback credit card for your business
1. Cash rewards program
One of the main benefits of a cashback credit card is the rewards program it has to offer. Most cash reward programs have a maximum limit, usually offering you up to 5% cashback return rewards. However, keep in mind that there usually might be a maximum limit you can reach.
Alternatively, other cards will only offer you cash back for particular purchases, such as at a gas station or restaurant. Each cashback credit card is different and doesn’t have the same annual allowance. Some cashback cards don’t support the idea of using a credit card with NFC technology or a virtual wallet, including Google Wallet.
So, if you hold a cashback credit card with an annual limit of 5%, spending more than $30,000 won’t further contribute to accumulating cash back rewards. Unfortunately, most consumers don’t take the necessary time to read through the fine print; they open a credit card account, supposing cashback reward programs are more generous than they are.
2. Flexibility
In several cases, cashback credit cards give you the chance to earn more rewards compared to purchases made on travel cards. For example, you can pick a card that offers rewards in favor of your business type or even consider applying for a flat-rate cash back reward card that provides the same amount of potential earnings on each purchase.
Many business cashback credit cards will offer you welcome bonuses that seek to earn more and contribute to your business growth.
Nevertheless, different companies offer you the chance to boost your margins one spending at a time. For instance, Juni offers a 2% cash back return after the first 30 days. After 30 days, it’s a 1% return. So you can sign up for Juni to get high cash back returns within your first month!
3. Redemption potential
Cashback credit cards offer much more flexibility for redemption options than other credit cards. In several cases, you can redeem your cashback rewards for gift cards, online purchases, and much more. This is great if you are considering reinvesting in rewards for your business.
For instance, travel credit cards also offer many redemption options, but you might not receive the ideal value you are looking for when it comes to other business-related expenses.
4. Annual fees
Depending on the cashback credit card you are using, you’ll need to pay an annual or monthly fee for the card you are using. Fees might range from monthly to annually. Each cashback credit card has its own fee rate, so it’s always important to see what your options are before using them.
However, we consider this an advantage since you can use excellent cashback credit cards with high return rates and low annual fees. Avoid using cashback credit cards that wipe out earnings only by the fee.
5. Your spending habits have changed
Cashback credit cards tend to offer high earning rates; the best part is that you can use them for many expenses. For instance, let’s say your business budget has significantly decreased. Your cashback credit card can help balance it out and reward you accordingly.
Every business has different expenses, and not every business might have a sufficient budget at the moment. However, remember that there are other cashback credit cards you can use. Here are some of them:
- Flat rates: These cards offer an excellent rate of cashback rates. Despite the purchases made, they still provide an outstanding level of simplicity. Most flat-rate cashback credit cards offer up to 2% on eligible purchases, where you use 1% of that cash back to earn for yourself and 1% to pay your bills. Some cashback credit cards might even offer you a sign-up bonus after you spend significant money on purchases in the first three or six months of your new account.
- Rotating-category card: Different bonus categories are offered quarterly or monthly. The percentage of cashback return will vary, but some might offer up to 5% quarterly based on the set amount they ask you to spend.
- Tiered-earning card: These cards will have higher earning rates for specific bonus categories. Some cashback credit cards might offer you a higher return rate on particular services and a lower percentage on others.
In short, you may find these credit cards handy in the long run.
6. Cashback card options are improving
In the past few years, issuers have significantly improved cashback credit cards by bumping up their values. As a result, more options are available to consumers than before. Additionally, issuers have increased sign-up bonuses and benefits on cashback credit cards that compete with travel rewards.
So, each year, issuers are updating their values and giving you the option to earn high cash back returns, along with more bonuses than ever for your first three months of spending. Many businesses aren’t aware of it, but cashback rewards are widespread.
What do you need to look for when you use a cash back credit card?
Many options are available nowadays, so it’s important to identify the ideal credit cards that suit your business. Here are the following factors you should evaluate when choosing a cashback credit card:
- Cashback rate: The amount of money you are granted based on your spending levels. Although you want to maximize cashback rates, assessing other important features is vital before applying.
- Minimum purchase rates: Several cashback programs might require you to spend a minimum before being able to apply for a cashback credit card . For small business owners and entrepreneurs, it’s never an issue. However, if you see that the monthly minimum is way higher than your expenses, the best option is to look for an alternative!
- Bonuses: Cashback credit cards aren’t limited to the extra money you can earn. Each program differs, but you can take advantage of the bonus cash you earn after you reach a suitable level, like $0 annual fees or more. As with any other credit card, setting a budget for yearly expenses and alternative costs is essential. In short, always be aware of interest rates and fees that are added to your card.
- Expenses: The bonuses you receive from purchases will vary depending on your cashback program. A few cashback cards will fully reimburse expenses related to your business, while others will relate to the spending category. However, always be vigilant of the cashback levels when you sign up for a card. Also, see the reviews and what others have to say. After all, roughly 84% of people will trust reviews before they make a decision.
- Maximum limit: Some cashback programs might have no spending limits when you use them. However, not all of them do this. There are still many cards that will significantly reduce benefits once you exceed a certain limit set by the program. For example, if the spending maximum limit is $10,000 and you spend more than that, your benefits will reduce each time you spend more than this amount. Therefore, always check up with the maximum limits allowed before you choose to go with a cashback program.
Wrapping everything up
That’s everything on the top six benefits of cashback credit cards. Hopefully, while reading the article, you came up with some new ideas to consider offering your team to help make the right choice when choosing a cashback credit card, considering there are so many options available!
Take into account what your business can offer, be it financially or operationally, and make sure that when you choose the proper cashback program, it contributes to the growth of your business. There’s nothing worse than rushing through the process and ending up having to constantly change between cashback reward programs.
Figure out what runs your company’s boat and keep that pace. In turn, you’ll contribute more to your business, benefiting you in the long run.
