by Debi Enders
Business credit cards provide business owners with access to capital and the ability to separate personal and business expenses. Business credit cards also provide a convenient and secure way to replace office petty cash by allowing business owners to request cards for employees. Here are the different options:
Rewards cards. Most business credit cards today include some type of rewards program, with the business owner earning points for purchases. Small-business rewards are often fulfilled just like personal rewards, tied to a web-based experience in which customers register online to access and redeem their point balances.
Cash-back cards. Some issuers offer card programs that build a cash-back rebate based on purchase totals. Such programs may provide the rebate annually or at other intervals based on customer request or account activity. A cash-back program is often attractive to the busy small-business owner; however, some don’t like to be locked into a single redemption option.
Miles cards. Like the cash-back card, a “miles” card ties the business owner to a single rewards benefit. In this case it is for airline travel. Certain programs offer a specific number of miles per dollar that is spent in the program and allow the customer to apply those miles toward the cost of airline tickets. The value of the miles may vary across issuers and programs.
Nonrewards business cards. The original business card offer was a relatively simple product, designed to track business spending, provide an emergency purchasing tool and add float to payments. Business cards without rewards usually have a lower APR, so those interested in revolving a balance for financing a larger purchase may find it to be an appropriate option. Whichever credit card you may select, keep use within acceptable limits.
Debi Enders (debi.enders@commercebank.com) is assistant vice president, small business banking at Commerce Bank.
Submitted 9 years 304 days ago