Cash back or points: Which type of corporate credit card rewards is best?

Not all corporate reward programs are created equal. Learn why cash (back) is king.

There's no way around it—expenses are a part of doing business. But that doesn't mean you can't benefit from the purchases you make to keep your team productive and your company growing. These days, it's not hard to find a business corporate card with a lucrative rewards program.

There are many features to consider when choosing the best corporate card for your team, and landing on the optimal rewards program can directly impact your bottom line.

Below, we help you decide if a points-based or cash back business corporate card is right for meeting your company’s needs.

Pros and cons of points

Credit card rewards were first introduced in the 1980s and were often tied to frequent flyer or hotel loyalty programs. This set the stage for the travel-centric, points-based reward programs that are still prominent today.

But just because points are the longest-running option doesn't make it the best.

Points can still be a great asset for business teams who travel frequently. You can redeem your points balance to book flights, accommodations, or rental vehicles—or to secure upgraded travel experiences. Depending on the card and loyalty program, you may also find opportunities to earn 2X to 5X points on certain purchases, helping you achieve a desired reward faster.

In the era of Zoom meetings and virtual conferences, however, the allure of accumulating travel points has lost its luster. Many businesses have left point balances largely untouched for the past two years—and, in some cases, these points will expire before they even have a chance to use them.

Beyond travel, it's common for points to be redeemable at retailers, either for purchases or gift cards. The downside is that many teams find the process of redeeming points to be overly complicated and time-consuming. Certain reward programs also allow you to convert your points to cash—although you can expect to receive around only $0.5 per point, a notable loss in value.  

Counterpoint: benefits of cash rewards

The alternative to points is choosing a cash back corporate card. Cash back programs are typically straightforward—as you use the card for business expenses, you get a percentage of each purchase added to a cash balance.

The advantages of cash back are obvious but significant:

• Cash rewards can be applied toward any type of future purchase.
• Unlike points, you won't run into any redemption restrictions such as brand requirements or blackout dates.
• Even if you decide to use your rewards on business travel, cash back gives you greater flexibility and more options.
• Cash never expires.

Now that we've identified cash back as the smartest reward for modern businesses, let's cover how you can find the best cash back card for your company’s needs.

Tiered or flat rate?

There are two basic structures for earning cash back: flat rate and tiered programs. Understanding your team's spending habits and expense categories will help you decide which type of program will deliver the greatest rewards.

With a tiered cash back system, you earn a higher rate on bonus purchases like dining and travel. These can be beneficial if most of your major expenses fall into these categories—but if not, you may end up earning less cash back overall.

For example, the Chase Ink Business Cash® card offers a capped 5% cash back on office supplies and services such as internet, cable, and phone for the first $25,0000 spent—but only 1% on all purchases outside these tiers.

Other cards offer a flat rate of cash back on all purchases, making it simple to anticipate how much you can earn based on your expenses.

Keep in mind that some of the cards with the highest cash back percentage also have the strictest payment terms and added fees. For instance, the CapitalOne Spark® 2% Cash Plus card lets you earn 2% cash back on all purchases—however, not only does it cost $150 a year but a full balance payment is required at the end of each statement period or you will be charged a 2.99% late fee.

If you want the best of both worlds, the Rho Card offers meaningful cash back on all elligible purchases or the ability to stretch payment up to 60* days (*inclusive of statement period). Plus, no fees.

Mind the fine print

In addition to the reward structure, be sure to pay attention to terms and conditions that may be buried below a credit card’s promotional offers and benefits. These can include:

• Annual fees that instantly cut into the cash back you earn. Some companies also charge a fee for each card you issue within your team, which can quickly add up.
• Bonus rewards that entice new members but often come with reward caps or time restrictions. In the long run, the bonus will pale in comparison to what you can earn throughout the year.
• Redemption terms that restrict when you can redeem your cash back—like on a quarterly basis or only after you reach a minimum threshold
• High barriers to entry, with credit cards offering the highest rates of cash back also requiring an excellent credit rate to qualify

Maximizing your cash back

Once you decide on a cash back card, the next step is to optimize your reward opportunities.

An easy way to do this is to use your card for more of your current business expenses—instead of checks, ACH transfers, or other payment methods. You're already spending the money, so why not get rewarded?

With physical and virtual card options the Rho Card makes it simple and safe for your entire team to make corporate card purchases—and to earn even more cash back for your business.

Ready to earn more cash back?

Don’t leave money on the table. It’s time for your business to put the best corporate card reward program to work.

The Rho Card is designed to be the smartest, most transparent way to earn meaningful cash back on your business expenses—with no fees or added hoops to jump through. Cash back rewards are accrued when a repayment is made on your Rho Card and then are quickly redeemable in just a few clicks. It’s that easy.  

In addition to being exceptionally rewarding, the Rho Card offers a score of other perks. Our expert team would be happy to show you exactly how it can benefit your business.