If you were wondering how cashback and business credit cards work, then you should take a look at this comprehensive guide! You will learn their pros and cons and how to make the best out of them!
CASHBACK CREDIT CARDS
The only way to make the best out of cashback credit cards is by learning everything about them. That's why we've gathered the main information you need to know to understand how they work. Here you will find the pros and cons of cashback credit cards, how you can automate your rewards to keep track of your rewards and everything you need to know about cashback debit cards. Check it out!
Pros & Cons
Getting rewards while you spend money is amazing. Most credit cards offer a reward program to entice you into signing up. While some cards will offer points in exchange for every dollar you spend, cashback credit cards will offer the possibility of getting some money back.
Here’s a list of all the things you should take into account.
- They are easy to understand. You can keep up with how much you’ve earned because you don’t have to convert points and miles into equivalent cash. This is already cash.
- Your cashback is easy to redeem. There’s no trick, really. You just need to connect your bank account for a direct transfer, although gift cards and statement credits are also available options.
- Variety of bonus categories. Depending on the cashback credit card, you could earn high-rate rewards on categories that rotate throughout the year. Some other cards offer an unlimited flat-rate cash back on any purchase.
- Not everyone qualifies. In order to be able to apply for a good cash back credit card, you need to have a good FICO score of at least 700 points.
- Signup bonuses. Cashback cards usually offer a sign-up bonus, but in order to redeem it, you need to meet a minimum spending requirement. This could tempt you into spending more money than you can afford, resulting in a balance you can’t pay in full and incurring in interests.
- Tracking bonus categories. As the categories rotate throughout the year, you need to be disciplined if you want to make the most out of your cash back credit card. Keep track of the bonus programs so you use your cards accordingly.
How to automate your credit card rewards
It takes a lot of work to figure out which rewards or cashback credit card would meet your needs in the first place, and oftentimes we end up not making use of them.
Here are four ways to automate your credit card rewards and monthly payments and make the process much more organized.
- Use AwardWallet to track your points and miles
AwardWallet is a free service that allows you to manage all your travel points/miles in one place. It's a real time saver when you are managing dozens of loyalty accounts with varying expiration dates.
All you have to do is add your current award accounts to get started and AwardWallet will track and monitor your rewards programs and itineraries. This includes notifying you if your points are about to expire or if your point balances have changed for any reason.
- Check out Points.com
Points.com tracks your loyalty programs, exchange points and miles between programs, and redeems them for gift cards
Joining Points.com is free, and once you sign up, you'll have one password and login for your programs, which is much simpler than keeping track of multiple logins.
- Use Reward Summit to maximize your miles
Reward Summit is an app that tracks your credit card rewards programs so you never miss out on another dollar again.
When you sign up for Reward Summit and connect your credit cards to your account, the app helps you choose the right card for each purchase you make based on which one offers the most rewards.
BUSINESS CREDIT CARDS
If you are an entrepreneur or own a small business, you probably are wondering when it's the perfect moment to open a business bank account and get Business Credit Cards. So, here's a guide that will help you understand timings and detail what type of credit card you need for your business. Check it out!
Identify when it's time to get a business account
Every entrepreneur or new business owner wonders when is the right time to open a bank account for their business. It will happen eventually, but how exactly do you know it is time to open a bank account for your business?
It's time to open a bank account for your business
A) When it has too many transactions:
When you are taking the first steps in a business, it's more likely to run it through your personal bank account. However, when the business starts to grow and the number of transactions boosts, you will notice that you will need a specific bank account for it. Once you have a separate bank account for your business you will be able to manage it easily.
B) To improve your business' image:
If you want to build a powerful image for your business, then you should avoid writing checks out of your personal account! It looks unprofessional and won't help build confidence with your suppliers, your employees and your clients.
If your business has a special account, then its name will appear on checks and other transactions. In addition, it will strengthen your brand and will show you are open for business.
C) To protect your identity:
If you use your personal bank account for your business you will be more vulnerable to potential issues like fraudulent activity or identity theft. If your business has its own bank account you can limit the damage.
D) To build a business banking relationship:
Having a business relationship with your bank is important. It can help you negotiate benefits for your business, like providing credit cards for your employees and partners, and can even let you obtain bank financing when needed.
E) To accept credit card payments:
If your business counts with its bank account, you can accept credit card payments at your store. This isn't possible through a personal bank account. Accepting credit card payments at your business can improve your relationship with your clients, so you should seriously consider having a commercial account.
E) To sell your business:
If you are thinking about selling your business, then you should definitely open a bank account for it. This way, once you sell it, the bank account will transfer to the new owners. Besides, by having a bank account for your business you will have easy access to its financial history and other documents you will need in order to sell it.
Why you should have a Business credit card?
The main idea behind having a Business Credit Card is to separate your personal expenses from those related to your work. There are many reasons to do so, but it’s mainly because it’s an easy way to stay organized. Streamlining your finances will also come in handy when preparing your taxes. It can also help you reduce your tax bill!
Whether you’re a business owner or a freelancer, if you work in a big company or a small one, there’s a Business Credit Card that fits your needs and is waiting for you. In each of these positions, you’ll need specific features in your future card to complement your work style. Find out which rewards and perks are the most useful for you!
You’ll find that the most common offers are welcome bonuses, cashback rewards, and points related to travel expenses. The first ones are usually a sum of money that you’ll be given as a bonus if you reach a certain spending amount within the first months after your card purchase. The other two rewards are more related to products and services whose price will be lower. Keep in mind that you don’t need to pay taxes on these credit card rewards!
If you don’t travel much at work, you won't receive many benefits from airline miles and hotel points. In this case, having a card that offers big rewards in these forms won’t probably be used to its full potential. You should look for cards that include car coverage if you use this vehicle a lot, but you should focus your search on other aspects if that’s not your case.
Many businesses have constant spending patterns. In other words, they usually spend their money on the same items and services each month. This should point your search for a Business Credit Card in the direction of those that offer high cash back earnings in the categories where you usually make the biggest purchases.
Likewise, there are also cases where spending patterns are more irregular. There are Business Credit Cards that offer bonus cash back on different purchases, which you can usually choose and switch monthly. This might suit you the best, as you’d be able to make your purchases each month based on the category where you have the highest cashback returns.
Best Business Credit Cards
You can find many Business Credit Cards available to freelancers or business owners with rewards like cash back. Here are four of the best ones that you should definitely consider if you’re looking for one.
1. American Express: Blue Business Cash Card
This card has a 0% annual fee and simple terms. You can earn 2% cashback on all your purchases, which is very useful if your purchases aren’t limited to one category. However, this cashback is lowered to 1% after you hit a threshold that consists of $50,000 a year.
There’s no welcome bonus, but this company makes it up with an interesting addition: a benefit called Amex Offers, reserved only to the company’s cardholders. Because of a partnership with popular travel merchants, retailers, insurance companies, and utility companies, you’ll get cashback and statement-credit offers at them thanks to Amex Offers.
2. Bank Of America: Business Advantage Cash Rewards Mastercard
You’ll also find a 0% annual fee with this card, although the way its cashback rewards work is more complicated. There are three categories with different benefits. The first one gives you 2% cash back on dining, while the second one lets you earn 3% cashback on a field of your choice (within their given options), which you can switch each month. This bonus is limited to the first $50,000 every calendar year and covers all combined purchases. Lastly, you’ll earn 1% cashback on all other purchases.
There’s a welcome bonus of $300 statement credit if you manage to spend $30,000 before 90 days pass after you’ve opened your card account. In addition to this, you’ll receive 75% more cashback if you’re a preferred Business Platinum Honors member in this company’s Preferred Rewards program.
3. Chase: Ink Business Cash
There’s no annual fee on this card either. You’ll also find different cashback rewards in different purchases: there’s 5% cashback for what you’ll buy in an office supply store, and on Internet, cable, and phone services; you’ll get 2% back on purchases at restaurants and gas stations; there’s 1% cash back on the other fields. Keep in mind that the first two rewards have a threshold of $25,000 each, which covers all combined categories.
You can choose between several redemption options, which include merchandise, gift card statement credits, and travel-related services and products. The last option is only available if you pair up this card with another one that offers Ultimate Rewards.
There’s also the profitable possibility to earn a hefty welcome bonus with a relatively low spending amount. If you spend $3,000 with this card before three months go by after you first got it, you can earn $500 in bonus cash back! Compared to other bonuses on this list, there’s the same time limit for a bigger reward, which is obtained with less money.