A small-business owner’s guide to credit card rewards - Bankrate.com

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Narrow your search with CardMatch™
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Narrow your search with CardMatch™
Looking for the perfect credit card?
Narrow your search with CardMatch™
Looking for the perfect credit card?
Narrow your search with CardMatch™
Looking for the perfect credit card?
Narrow your search with CardMatch™
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
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When starting a business or side hustle, a business rewards credit card can be a money-saving tool. Despite credit card companies revamping rewards programs to make them more pandemic-friendly, 31 percent of Americans didn’t redeem any rewards in 2020. That’s money left on the table—and in business, every dollar counts. Developing a smart strategy for maximizing your credit card rewards can help you reach your entrepreneurial goals. 
As a business owner or side hustler, your spending habits may be uniquely suited to earning credit card points, miles or cash back. For example, if your business requires you to fly regularly, you’re primed for earning miles on flights. Or, if you run a contracting business, you could be earning cash back on the building materials and supplies you buy. 
You’re already spending money for your business. Why not earn some of it back?
When you’re running a business or side hustle, every choice you make can affect the bottom line. Getting a rewards card can be a smart business decision for several reasons. 
Here’s a closer look at some of the top benefits of having a business credit card:
Another advantage of business rewards cards is that they’re not exclusive to certain types of businesses. Virtually any kind of business can benefit from using rewards credit cards. It’s all about choosing the right card for your business. 
For example, say you run a landscaping business. In that case, choosing a card that pays you cash back on gas and other purchases could help you earn money back when fueling up vehicles and equipment or stocking up on other supplies. Perhaps you run an online subscription box business from home. You could earn rewards with a card that pays you points or cash back on internet services and shipping. 
The first thing to know about choosing a rewards credit card for your business is that they aren’t one-size-fits-all. The best card for your business will depend on your spending habits, needs and goals. 
As you weigh business credit card options, here are some things to consider:
In terms of whether cash back, points or miles are better, there’s no concrete answer. If your goal is to save your business money in real-time, you might choose a cash back rewards card since that’s effectively like getting a discount on the things you buy. 
On the other hand, if you’re hoping to save money on travel, you might be better off with a card that offers points or miles. You can accumulate points or miles as you spend, then use them as needed to book travel. A card that offers regular anniversary bonuses of points or miles can help you rack up rewards even faster. 
You might not always want to use your credit card rewards to reinvest in your business. Maybe you want to accumulate some travel miles so you can book a dream vacation.
Since business credit card rewards are not taxable, redeeming points or miles for personal benefit won’t create any tax headaches. However, you should be aware that earning cash back can affect how much you’re able to deduct for business purchases.
And you could run into challenges if you’re running your business with a partner. In that scenario, you’d need to work out an agreement about how business rewards should be shared to avoid conflicts over points, miles or cash back. 
Employee card purchases are treated the same as purchases associated with the primary cardholder, which means they earn rewards, too. You can also simplify expense tracking and record-keeping by having all purchases charged to the same account. And many issuers allow you to add employees for no additional fee. 
If you’re considering adding employees to your business rewards account, consider whether you want to set limits on where the card can be used or how much can be charged. Depending on the card, you may have built-in features that let you assign spending limits to individual employee cards. And if your card lacks this feature, consider creating a written policy for card use, so your employees understand what is or isn’t allowed. 
Making the most of a business rewards credit card starts with having a plan. Here are some concrete steps you can take to determine your rewards strategy:
If you’re interested in growing your business or side hustle, a business rewards card could be a stepping stone for reaching your goals. And aside from earning rewards, they can make managing the accounting side of your business easier. What’s most important is taking time to find the right card that aligns with how your business spends and how you plan to use the rewards you’ve earned.
Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.
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