Are business credit cards rewarding for small businesses? - FOX 21/27 WFXR Roanoke/WWCW Lynchburg News, Weather

Are business credit cards rewarding for small businesses?

Posted: Updated:
Considering how much money your small business pumps into your local economy, the taxes you pay and your company's role as part of the engine that drives the national economy, you probably think someone should be giving you some kind of reward.

A rewards program from a business credit card can be a great way to get something back for all the money you spend running your business. But you can feel overwhelmed when you start reading the fine print and sorting through the restrictions. You may even start to wonder just how "rewarding" that rewards program really is.

When you're evaluating the value of a rewards card, start by considering the basics. First, do you really need a credit card specifically for your business? It's virtually impossible to operate a small business today without a charge or credit card. Not only does a business charge card allow you to separate business and personal expenses, it offers you a layer of protection if there's a problem with your purchases. Since you make regular payments for your business anyway, why not get something back for it in the form of a rewards program?

Next, consider what you would like to get out of a rewards program. Is getting cash back on purchases a priority? Are you looking to accrue points you can use toward travel? Do you want rewards in the form of merchandise that you can keep for yourself, use as an incentive for employees or as gifts for clients and customers?

Refining your objectives for a rewards program can help you evaluate how well a credit card may meet your needs.

When you're ready to seriously begin comparison shopping, be proactive about it. Don't just wait for the offers to arrive in your mailbox or inbox - and arrive they will. Being reactive in choosing a credit card reward program may leave you signed up for a card that doesn't really fit with your rewards objectives. Instead, turn to credit card comparison websites that can show you the terms, conditions and rewards offerings for a number of different cards.

Whatever your rewards objectives, there are a few additional points to consider:

* What are the criteria before you start reaping rewards? And are there any restrictions on how or when you can actually use them?

* Does the buying power of the card meet your business needs? Are the rewards worth it if the card's credit limit is too low, the interest rate too high, or the card doesn't offer purchase protection?

* How much is the annual fee, if there is one? And can you expect the cash value of the rewards to exceed that fee, meaning the rewards program has paid for itself?

* In addition to the rewards program, does the credit card offer you discounts from companies that you commonly do business with? For example, in addition to accruing rewards points, American Express business credit card users get automatic discounts when they use their card at FedEx, Marriott hotels, Hertz, OfficeMax, and other businesses that you may regularly use.

Ultimately, only you can decide just how valuable a business rewards card is to your small business. But careful, proactive evaluation of a rewards program can help ensure it really is as rewarding as possible for your company.