The Top Three Ways to Make Credit Card Rewards Work for Your Business

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External capital is used by almost 70% of the world’s entrepreneurs to fund companies and the expenses therein. According to a survey conducted in 2017 by Trust Insights on Wealth and Worth, credit card cash advances account for most of that money, second only to personal loans. As a result, the Small Business Administration sees about 46% of business owners using their own credit cards for company spending. Unfortunately, some entrepreneurs don’t know how to best use that kind of capital and can’t avoid going into extreme debt. It’s even harder for small business owners to make money by using credit cards, even cards with rewards programs because those programs often fail to align with entrepreneurial spending habits. The struggle to find credit cards with programs that maximize potential is difficult at best, with some business owners missing out on tremendous opportunities due to overlooked and underappreciated differences in card issuer incentives. Three Ways to Use Credit Cards in the Most Rewarding Way By matching credit cards rewards programs and other membership benefits with the areas of the business which require the most spending, entrepreneurs can make their credit cards work for them instead of against them. Using credit cards for external capital isn’t always a bad idea, especially if you have a workable plan for avoiding financial pitfalls. It’s most beneficial to minimize card debt by making timely monthly payments but pouring extra payments on the cards with the highest interest rate can reduce debt a lot faster. However, making the most of credit card use and issuer rewards requires more planning and consideration than simply paying off debt. Reward values and interest rates vary between cards, and the changes in reward value are most apparent depending on where and how they are applied. So, a well-thought-out strategy needs to consist of more than just numbers. The following tips and tricks will help entrepreneurs develop a cohesive strategy that will make their credit cards and subsequent rewards programs work to their advantage: 1. Budget Your Points Like They’re Money Diversify the types of cards you use to take advantage of different rewards programs. Otherwise, you’ll be stuck with a bunch of points you never use because the rewards aren’t versatile enough. Once your current points become sufficient for the fiscal year, switch to using a cash-back card after accruing them. Some credit card companies offer bonuses of up to $1k in cash back, which can add up quickly and be combined with other rewards for discounts on things like dining, traveling, shopping, and business expenses. TRICK: Cash-back incentives are sometimes worth less than the points that the card issuer offers, so keep a couple cash-back cards in your pocket and be sure to maximize your points on rewards cards first. 2. Pick Credit Cards that Reward Your Spending Habits If you choose credit cards that give cash-back, points, or other rewards for things you never buy, then they’re basically worthless. Strategically maximizing credit card rewards programs is not difficult if you have a good understanding of your spending habits. A savvy business owner is aware of where his or her company allocates funds, so picking appropriate rewards programs that offer incentives in those categories is much easier for them. For example, if you travel a lot, get a credit card that has a rewards program which offers cash-back or points when you purchase airfare, lodging, or rental cars. If most of your spending is on office supplies, business meetings, and advertising, pick your credit cards accordingly. TRICK: Be sure to choose reward-giving cards for more than one category for a well-rounded approach that renders the most points per dollar spent. 3. Opt for Transferable Points/Rewards Only To maximizing points and the benefits therein, pick credit cards that offer transferable points. Although possessing numerous cards isn’t necessary to earn lots of points and rewards, maintaining 2-3 cards isn’t a bad idea. With a card issuer who allows the rewards to be transferred, you can more easily take advantage of airline, hotel, and merchant partner incentives. Flexibility breeds opportunity, which in turn fosters savings and frugality. TRICK: Credit cards with transferable points help companies avoid losing points when certain airlines, hotels, and merchant partners make point value adjustments. The Final Verdict Small business owners, entrepreneurs, and startup founders need to use their credit cards responsibly, but having a strategy is a surefire way to fund business expenses, emergencies, and expansions. By following these three easy tips and tricks, financial burdens are lightened tremendously, especially on a company’s most common expenses. With a little planning and some well-made strategies, it’s much easier to harness the rewards offered by credit card issuers, achieve company goals, and attain the funds needed without seeking so much outside capital. This article was written by for For Sales and Support Please Contact us at 203-518-8071 or, email us at: For Media Relations Please Contact .