Rewards like free flights and hotel stays are one of the major perks of credit cards. But a recent study shows that many small business owners aren’t taking full advantage of the rewards they earn by using their business credit cards.
The latest Citibank Small Business Pulse showed that fewer than one in five small business owners are trading in their credit card reward points to take vacations.
Airline credit cards and hotel reward credit cards are very popular among small business owners. Seventy-seven percent of them report using a credit card to pay most of their business expenses. And more than one-fifth of them are racking up reward points, frequent flyer miles, or cash back rewards on those credit cards.
The Citi survey found that although business owners are savvy about earning and redeeming credit card rewards, many of them use rewards mostly for business travel. One in three small business owners travel a minimum of every other month, and some travel much more, up to several times a month. When traveling, 62% use a business credit card to cover airfare, hotel, and car rental costs.
Business credit cards pay in rewards
Business credit cards often give cardholders higher value rewards than other types of consumer credit cards. For example, the CitiBusiness®/AAdvantage® business credit card gives double miles – two miles per dollar – for every dollar spent on American Airlines purchases. It also gives two miles per dollar on office supplies, phone, Internet, and car rental. Cardmembers get a 5% mileage bonus based on their total purchases each year when membership is renewed.
Other perks include free checked baggage on American Airlines flights, one free companion travel certificate each year that they spend at least $30,000 on the card, and 25% off in-flight purchases on American Airlines flights.
Lora Monfared, Citi’s director of small business, said business owners use rewards based on their needs. “What’s most important is that they optimize rewards – whether that’s rewarding a high-performing employee with a weekend trip, offsetting the cost of business travel or taking a well-deserved vacation.”
The Citibank Small Business Pulse
The Small Business Pulse is conducted by telephone each month. This survey was answered by a random sample of 802 small business owners.