Business Credit Card Rewards: A Small Business Guide

Key takeaways

• Charge planned business expenses to a rewards card to earn cash back or points without spending more.
• Match your card to your top spending categories, and use signup and referral bonuses to earn faster.
• Redeem rewards for travel, statement credits, or gift cards to stretch a tight nonprofit or SMB budget.
• Pay vendors that do not accept cards through a platform like Melio so you still earn rewards.

How we let our credit card do our work for us

One of the best practices that we put in place was to charge all of the nonprofit’s expenses to our business credit card.

At first, we used cards because paying vendors was fast and easy. The real payoff hit when a new CEO joined and we transferred the corporate card. We had built up more than 200,000 points, worth over $1,500 in gift cards.

For a nonprofit organization on a tight budget, this extra cash was considerable. We used the gift cards towards company expenses, including purchasing snacks, giveaways, and tablecloths for events throughout the year. We were also able to address our office needs and buy pens, paper, and even new monitors.

That was essentially found money, over $1,500 we could reinvest in the organization without spending an extra dollar.

Why this matters to SMBs

Nonprofit organizations and small businesses have a lot in common.

Both types of entities generally have tight budgets and can struggle with cash flow. While nonprofits rely on various funding sources such as donations, corporate sponsorships, grants, and membership fees, small businesses make money from more traditional sources. However, they can still be subject to uneven revenue streams due to seasonal fluctuations, high operating expenses and overhead, or slow-paying customers.

The majority of them operate with very small teams. Most U.S. nonprofits are very small, and 82% of U.S. small businesses have no employees at all.

Due to their size, both SMBs and nonprofits don’t necessarily have a specific function for accounting or bookkeeping. This means that nonprofit executives and small business owners are the ones responsible for managing their organizations’ finances.

Taking into account their similarly limited resources, cash flow challenges, and size, credit cards can be a lifeline for both SMBs and nonprofit organizations.

Types of business credit card rewards

Business credit card rewards are the cash back, points, or miles you earn on eligible spending. Knowing the main types helps you pick a card that fits how your organization spends.

• Cash back: A set percentage of your eligible spending returned as money or a statement credit. It is simple to track and easy to put back into your budget.
• Points: Flexible rewards you can redeem for travel, gift cards, or statement credits. Their value often depends on how you redeem them.
• Travel rewards: Miles or points made for flights and hotels. They can be a smart fit if your team travels for conferences or events.
• Category and rotating bonuses: Higher rates in set categories, such as office supplies or dining. Some cards rotate their bonus categories, so check what earns more before you buy.

What you can do with rewards

Business credit card rewards are the cash back, points, or miles you earn on eligible spending. You can redeem them for travel, statement credits, or gift cards.

For example, points can cover airfare or hotel points for a conference trip. Cash back gives you a set percentage back on your account, so a card eligible for 2.5% cash back on office supplies returns $3.75 on a $150 purchase. That may not sound like a lot, but it quickly adds up when you buy larger items like new computers or printers.

How to maximize your rewards

To turn everyday spending into rewards, start with the right card. Apply for a business credit card if you don’t already have one, and keep your business expenses separate from your personal ones.

Here are a few additional methods you can use to make the most of your card.

Credit where credit is due

I was able to see first-hand how using a business credit card can benefit nonprofit organizations. Credit card rewards were an unexpected, but welcome windfall to our tight budget.

When these perks are considered alongside their convenience, speed, and implications for cash flow management, it’s clear that using business credit cards to pay for expenses and redeem points can help set up SMBs for success.

Looking for a way to pay all your vendors with a credit card? Sign up for Melio.

Business credit card rewards FAQs