Business travel rewards vs. cash back credit cards

Two popular business credit card options are travel rewards cards and cash back cards. Both can be beneficial for your business, and earning rewards for your expenses is a benefit worth considering. But which card provides the rewards that best align with your business’s needs?

Take a look at how business travel and cash back cards compare across key factors like earning rates, redemption options and annual costs to find the right fit for your company.

What you’ll learn:

• Business travel rewards credit cards allow you to earn points or bonus miles toward business travel expenses. They often come with additional benefits, like airport lounge access.

• Cash back rewards can offer a simple, flexible way—like a statement credit, check or gift card—for businesses to redeem their rewards.

• Understanding your business’s needs can help you decide which type of rewards card makes the most sense for your organization.

The difference between business travel rewards and cash back rewards comes down to how they are earned and redeemed. Travel rewards are typically offered as miles or points for travel purchases, while cash back rewards return a percentage of your spending as cash. 

Whether you use your business credit card for monthly office expenses or to treat clients to dinner, having a card designated solely for business expenditures can help streamline your budget. Choosing a rewards card—whether travel rewards or cash back—can also help you get more value from those everyday business purchases.

With so many benefits to consider, it might be tough to decide which business rewards card makes the most sense for you. Should you get one that offers points or miles that can be redeemed for travel? Or should you go for one that offers cash back on your purchases? Here’s a little more information on both types of business rewards cards to help you decide.

With a business travel rewards card, you’ll accrue miles or points on your purchases. These rewards can then be applied toward travel expenses like airfare, hotel stays or rental cars. So when you use your card for business expenses, you can save on business travel while tapping into additional benefits like:

• Travel benefits: Cardholders can earn rewards and enjoy perks like access to airport lounges, credits toward Global Entry or TSA PreCheck®, free hotel stays, complimentary checked baggage and more.

• Travel insurance: Travel rewards credit cards often come with travel insurance, helping you rest easy knowing you may be covered if you have to cancel your trip, it’s interrupted or delayed, your bags are lost, etc.

• Managing travel expenses: Using a credit card for business travel expenses helps you streamline your budget and understand where your money goes on each trip.

Business cash back credit cards usually allow you to earn a percentage of cash back for each purchase you make with the card. Some cards have a flat cash back rate, while others offer higher percentages for certain spending categories. You can typically redeem your cash back as a statement credit. Some card issuers may also allow you to redeem rewards for gift cards. Other benefits can include:

• Flexible rewards redemption: Cash back credit cards can offer straightforward rewards with different ways to redeem, such as a statement credit or a check, based on what makes the most sense for your business.

• Opportunity to maximize rewards: You can maximize your spending by choosing a card that offers rewards in categories where you spend the most. For instance, if you’re always dining out with clients, go for a card that offers cash back for restaurant purchases.

• Lower annual fee: Business cash back rewards credit cards generally have low—or even no—annual fees.

There are pros and cons to both types of credit cards—business travel rewards cards can offer more elevated benefits and potentially higher rewards value for travel, while business cash back cards can provide more flexibility and an easy-to-understand, easy-to-redeem rewards structure. So how do you choose which type of business rewards credit card is right for you? Before you apply for a business credit card, consider your current spending habits and what type of rewards would be most advantageous for your business:

• You might choose a business travel rewards credit card if you travel frequently and are looking for premium travel benefits, like access to airport lounges or a credit toward Global Entry or TSA PreCheck®. Even if the card has an annual fee, the additional benefits could offset the cost. 

• You might choose a business cash back credit card if you’re looking to earn cash on everyday business purchases and want a straightforward rewards structure. 

When shopping for a business credit card that offers rewards, ask yourself the following types of questions:

• What is my business’s budget?

• Where do I use my credit card most often? 

• Do my employees or I travel frequently for business purposes?

• Am I buying office supplies, paying for shipping or covering office utilities?

• Do I take clients or employees out to dinner often?

Once you have a clear picture of your regular expenses, it will be easier to determine which type of business credit card makes the most sense for your organization.

Consider some advantages and disadvantages of business travel rewards credit cards:

If you or your employees travel often, a business travel rewards card could be beneficial. You can earn valuable rewards on travel purchases that may even cover the entire cost of a future flight. Plus, some business travel rewards cards offer additional benefits like access to airport lounges, free checked bags and hotel upgrades, which can make business travel more comfortable while helping you save on travel costs.

With a business travel credit card, there can be more restrictions when redeeming rewards. Generally, rewards are most valuable when used for travel purchases, and you might have fewer airline or hotel options since some cards only offer the highest rewards for purchases made with a specific airline or hotel brand.

Like business travel rewards credit cards, business cash back credit cards have benefits and drawbacks worth keeping in mind:

Cash back cards for businesses can offer more flexibility to earn rewards on many different types of purchases, rather than being limited to travel purchases. And the options for redeeming rewards can be more flexible too—allowing you to choose the reward that makes the most sense for your business, whether that’s a statement credit, a check or a gift card.

Unlike travel cards—where your rewards can go a little further with additional benefits—cash back cards offer straightforward rewards that won’t exceed their value.

Depending on your organization’s needs, a business travel rewards card or a cash back credit card can offer a variety of benefits that can help your business thrive. Bonus miles that can be used for travel expenses are advantageous for frequent travelers, while cash back rewards are flexible and easy to redeem.

Understanding where you could get the most value from the rewards will help you determine which type of card can be the most beneficial for you and your team. Ready to start earning valuable rewards? Compare business credit cards from Capital One to see which one best meets the needs of your organization and get pre-approved today—with no harm to your credit scores.