Should you get a business cash back credit card?

A cash back business credit card offers business owners an easy way to reinvest in the company. You can earn a percentage back on everyday business expenses like equipment, office supplies and utilities.

Learn more about how a cash back card can support your business’s financial goals and opportunities for growth.

What you’ll learn:

• Cash back business credit cards can help optimize your company’s spending.

• Cash back rewards give you money back for every eligible purchase you make with your credit card.

• You can redeem cash back rewards for statement credits, direct deposits or gift cards.

• You can evaluate cash back redemption options to determine what makes the most sense for your business’s needs.

Cash back business credit cards typically allow you to earn a percentage of cash back on each purchase you make. There are two main types of cash back cards:

• Fixed or flat rate: Cards that offer a consistent percentage back on every type of purchase

• Tiered or rotating: Cards that offer a higher percentage of rewards for specific spending categories, which may rotate monthly or quarterly

Cash back rewards usually accumulate and can be redeemed as a credit on your account, reducing your overall balance. However, some cards or issuers may allow you to redeem rewards for gift cards or even cash them out via check.

Cash back business credit cards work by returning a percentage of your spending as cash back, making their rewards programs more straightforward than points or miles.

The amount you earn will depend on the card’s rewards structure—whether it offers a flat rate on all purchases or more cash back in specific spending categories. As you spend with the card, your rewards keep accumulating and you can redeem them based on the card’s terms.

Here’s a closer look at how cash back business credit cards work:

You earn a certain amount of cash back rewards with each qualifying purchase you make with your business credit card, similar to a rebate. How much you earn on different types of purchases can vary. 

For example, suppose your card offers a flat 2% cash back for all purchases. If you spend $100,000 monthly on business expenses, you could earn $24,000 in cash back by the end of the year.

If your card offers tiered rewards, you’ll earn higher percentages for certain purchases. Examples may include 5% cash back on fuel, 2% cash back on dining and 1% cash back on everything else. Cards with tiered rewards typically have more stringent conditions, such as caps on how much you can earn or redeem at once.

Cash back rewards typically accumulate as you spend, but they’re not always available right away—you may need to meet a minimum threshold or wait for your statement to post before you can redeem them. 

Once you’ve accumulated enough cash back rewards—if they’re not automatically applied to your balance—you should be able to redeem them as a statement credit to reduce your account balance. Some business credit cards may also allow you to redeem cash back rewards for gift cards, specific product discounts or as a direct deposit.

Choosing the business card with the highest cash back rate may not always be the best option. To find the right fit, consider how the rewards fit into your business’s purchasing needs.

Many cash back business credit cards include features that can help you manage expenses and keep business and personal purchases separate—on top of earning cash back rewards. When looking to pick out a card:

• Consider where you spend the most. If you spend a lot in one category, like fuel, then a card offering bonus cash back on gas station purchases may lead to more savings. Or if your spending is more varied, a flat-rate cash back business card may be a better fit.

• Understand eligibility requirements. Credit card companies typically evaluate both your personal and business credit histories and credit scores to determine eligibility for a business credit card. In general, you’ll need at least a good credit score to get approved.

• Pay attention to card terms and conditions. Business cards with the highest cash back rates may have annual fees, higher annual percentage rates (APRs) or cash back earning limits. There may also be limitations on how you redeem cash back rewards.

• Review features and benefits. Look for a card that offers benefits aligned with your business’s needs. Maybe you’re looking for free employee cards or tools that integrate with your accounts payable process. Along with cash back rewards, consider which features would be most beneficial in supporting your daily operations.

Consider creating a checklist of what you want from a business credit card, such as bonus categories, an introductory APR, a low annual fee or cash back rewards applied automatically to your account. Once you determine your needs, finding a card that fits your business will be easier.

To maximize rewards and benefits for your business, try these strategies:

• Take advantage of additional benefits. Look for cash back business credit cards with promotional partnerships or bonus offers—such as rewards for dining, hotels or supply stores where you already spend regularly—to earn extra cash back rewards or additional discounts.

• Set employee spending limits. Setting spending limits on cash back cards can help ensure a manageable balance, even when you have multiple authorized employees using your business credit account. 

• Make responsible payments. Strive to pay off your card balance each month, which can also help improve your business credit score. If you’re going to be making larger purchases, consider a business card with a low introductory APR so you have time to pay off the balance before interest starts accruing.

• Get to know your card. Keep track of your business purchases across the board and understand the available benefits and reward rates. Cash back cards offer flexibility and adaptability to fit a wide variety of situations and business needs.

Here are answers to some frequently asked questions to help you choose the right cash back business credit card for your company.

A cash back business credit card could be a good choice for your business if you’re looking for a way to manage your budget and cover expenses while earning straightforward, flexible rewards. Do your research and choose the rewards credit card that best aligns with your business’s spending habits and financial goals.

With Capital One, you can enjoy business-grade benefits, from fraud liability and simplified budgeting to free employee cards. If you’re ready to start earning rewards for your business expenses, browse Capital One cash back business credit cards to see which one is right for you. You can even see if you’re pre-approved first, with no impact on your credit scores.