For some small businesses, the best way to save money is to spend some first.
With an eager eye on perks like discounted office supplies and shipping expenses, free airline trips and reduced hotel costs, many businesses are now turning to reward credit cards to help them trim their bottom line.
While similar to personal reward credit cards in many ways, the business versions differ in that they offer rewards that are more appealing to business owners.
"They often have business-friendly perks such as discounts at merchants like UPS or FedEx, and the purchases you make sit on a credit report that is separate from your personal one," Brian Kelly, founder of the ThePointsGuy.com, told BusinessNewsDaily.
Since each card and the rewards it offers is different, Kelly said it is important for business owners to do some research on each of the options if they want to maximize their rewards.
"Check the merchants with which your credit card issuer has partnerships," Kelly said. "Research the discounts available when making purchases through them and then choose the best for your needs."
Ben Woosley, director of marketing and consumer research for CreditCards.com, said there are a number of ways businesses can use reward credit cards as a way to save money, including:
- Shipping: Businesses that are constantly shipping products to clients and customers can save by selecting a card that offers free overnight shipping and discounts on other shipping options.
- Office Supplies: A number of reward credit cards partner with office supply stores and provide users with discounts each time they purchase items with their rewards card.
- Travel: Businesses that have employees traveling frequently can help offset the costs by using cards that offer discounts on future airfare, hotel stays and car rentals.
- Employee incentives: Employers can save money by using their rewards, such as free air travel or hotel stays, toward prizes for employees to recognize a job well done.
Among the other rewards that business credit cards offer include discounts at restaurants and on Internet and cable television services, gasoline, travel insurance and emergency assistance. Many cards also provide cash-back options that give users money back for each transaction, depending how much they spend.
And Woosley said reward credit cards offer businesses benefits beyond the obvious perks.
"Small business credit cards provide the businessperson access to an additional line of credit — which is often larger than on consumer cards — and segregates business spending from personal spending," he said.
Businesses that are using credit cards to save money should ensure they are maximizing their rewards, Kelly said.
"If you rack up enough points to redeem for a gift card for an employee, but you are only getting a value of 0.5 cents per point, it might be better just to purchase the gift card and put your points towards a more lucrative redemption, like an airline award ticket for a business-related trip," Kelly said. "Always do the math and determine whether you are getting a decent value from the reward redemptions that you want."
Our sister site, TopTenReviews offers a breakdown of the best credit card rewards programs.