Nearly all credit cards developed for small businesses come with generous rewards programs. Some accumulate points while others offer cash back, and a significant number provide cardholders with a hefty welcome-to-the-account bonus.
As long as you charge a certain amount of money within a specified number of months after opening, you can come out ahead by many hundreds of dollars. Making the deal even sweeter is that sign-up bonuses are generally not considered taxable income by the IRS, nor are the points or cash you earn as you charge.
So, are rewards credit cards worth it? Absolutely.
Because there is a wide variety of options, choosing a business card can be challenging. Offers change frequently, so review all of your options up to when you're ready to apply.
Here are a few of Bankrate's top rewards credit cards for business with compelling sign-up bonuses:
The Marriott Bonvoy Business® American Express® Card offers cardholders 6X points at hotels participating in the Marriott Bonvoy® program, 4X points at restaurants worldwide and U.S. gas stations, 4X points on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping and 2X points on all other purchases.
The current welcome offer boasts 75,000 points after you spend $3,000 in your first three months of card ownership. While that is a significant loss in comparison to the card's most recent welcome offer of 125,000 points after spending $5,000 in the first three months, it's still a solid offer.
According to Bankrate's latest point valuations, Marriott points are worth approximately 0.7 cents apiece - making the welcome bonus value about $525 if you redeem for Marriott stays. Coming in with a $125 annual fee, the Marriott Bonvoy Business Amex provides a flexible rewards scheme that can carry you a long way with the right amount of planning.
With the Hilton Honors American Express Business Card, cardholders can earn 12X points on hotels and resorts in the Hilton portfolio, 6X points on select business (U.S. gas stations, U.S. cellphone service providers and U.S. shipping purchases) and travel purchases (U.S. restaurants, airfare booked through Amex Travel and select car rentals) and 3X points on all other purchases. This all comes with a $95 annual fee.
New cardholders can earn 130,000 Hilton Honors bonus points after spending $3,000 in purchases within the first three months of card membership. Based on Bankrate's valuation, Hilton Honors points are worth about 0.6 cents apiece, making the welcome bonus worth about $780.
The Ink Business Preferred® Credit Card, which comes with a $95 annual fee, offers 3X points on the first $150,000 spent on travel and select business categories each account anniversary year (then 1X points), plus 1X points on all other purchases. The 3X points bonus categories include travel, shipping purchases, internet, cable and phone services, and advertising purchases made with social media and search engines.
Additionally, cardholders who spend $15,000 in the first three months of account opening will earn a 100,000 welcome bonus. You may trade them in for cash, equalling $1,000, but if you book travel arrangements via Chase Ultimate Rewards®, the bonus is worth $1,250. Chase points transfer at 1:1 ratio, meaning 1 point equals 1 transfer partner mile or 1 cent of cash back.
One of Capital One's newest business credit cards is a step up from the previous Capital One Spark Cash for Business. The Capital One Spark Cash Plus offers cardholders an unlimited 2 percent cash back on all purchases and unlimited 5 percent cash back on hotels and rental cars booked through Capital One Travel.
The card comes with a $150 annual fee and a generous welcome bonus. New cardholders can earn up to a $1,000 cash back bonus; $500 once you spend $5,000 in the first three months, and $500 once you spend $50,000 in the first six months of account opening. While this is one of the largest cash back sign-up bonuses among business cards, it can be quite challenging to reach if you don't spend nearly $8,000 per month for the first six months.
Cash back vs. travel rewards for business
As you can see, each card has its unique qualities. Some are designed for general cash back redemption while others are designed for travelers. If you aren't getting on airplanes or staying at specific hotels in the foreseeable future, a business travel credit card won't make much sense even if the points - initial and thereafter -are massive. In that case, you may gravitate toward a business card that offers cash back instead since it's more versatile.
No matter which card you're leaning toward, when you apply for a business card the issuer will check your personal credit reports and scores to determine qualification. To be eligible for credit cards with exceptional sign-up bonuses and perks, you will need to have a good-to-excellent credit score. That is generally perceived as a FICO or VantageScore between 670 and 850. If your company has established a separate business credit file, the issuer will review those reports and scores as well.
How to maximize rewards for your business
After deciding on and obtaining the right card for you and your business, make a plan to rack up the rewards. You can do this by charging as many expenses as possible, especially in those categories where the issuer will provide the highest reward values.
It's very important to steer clear of debt. To offset balance shock, you may want to delete your charges as you make them or on a weekly basis, but, as long as you delete the bill within the interest free grace period (approximately 30 days), your reward value won't be diluted by financing fees.
If you have trustworthy employees who travel for the business or can make business purchases, consider making your employees authorized users, since their charges will apply to the reward accumulation pool.
Pay attention to the perks that are embedded in the account. For example, most business travel cards come with free access to airport lounges and complementary checked luggage. And, if you're traveling internationally, using a business credit card that doesn't charge foreign transaction fees can save you a bundle.
There's nothing stopping you from getting additional business credit cards that are embedded with sign-up bonuses and other compelling benefits. Just be sure you can meet the minimum spend without descending into unmanageable debt.