Starting a small business? Need a beginner guide for business credit card rewards? A business credit card is a vital resource for purchases like buying supplies and stocking up on product. Travel, buying ads, and shipping costs can all go on the credit card. Since you can't avoid all those purchases, it would be nice to be rewarded for your spending. You can earn cash and/or travel points for just spending on your normal purchases. There are many business credit cards that come with rewards. But are they worth it if the interest rates you would pay on your credit card account outweigh the value of the rewards you receive? If you plan carry a balance on your credit card account you need to look for the lowest interest rate. But if you think you can fully pay off your credit card purchases every 30 days then you should look into a credit card that offers rewards.
Chase Ink Business Preferred Credit Card
Are you a new business owner looking to get a credit card? Or do you already have a credit card but you think you'd like to switch it to a credit card that earns rewards for purchases? Chase Ink Business Preferred Credit Card could be the best credit card option for you. Especially if you do not plan to carry a balance.
The Chase Ink Business Preferred card is a reward credit card specifically for businesses. This means it offers a loyalty rewards program. The more you spend on business purchases using the credit card, the more points you earn. This is especially true in the first 3 months after you sign up. During that first quarter you can get 80,000 points sign-up bonus just for spending $5,000. Every year you can get 3 points for every dollar you spend on many business purchases and expenses up to $150,000 per anniversary year. "Anniversary year" means that your eligible total for points is reset on the anniversary of the day your credit card began. Then you get a point for every dollar spent on credit card purchases after that. These points can then be redeemed for a cash value. Points can also be redeemed at a 25% higher value for travel through the Chase Ultimate Rewards program. Although it has an annual fee of $95, the sign-up bonus makes that more than worthwhile.
Other Chase Cards
Another option available to business owners is the Chase Ink Business Cash card. This gives you 5% cash back reward on purchases. It provides a cash back reward for some purchases that do not fall into the same categories as the Chase Ink Business Preferred card. These include purchases at an office supply store, gas, and dining. So it makes sense for your business to combine these two cards. You can use the Business Cash card for purchases like you'd make at an office supply store, gas station and restaurant. You can use the Business Preferred card for purchases in the other categories that qualify (like shipping, ads, etc.). There is no annual fee for the Chase Ink Business Cash credit card.
You can also combine other Chase credit cards that add points to your Chase Ultimate Rewards tally. These include Chase Sapphire Reserve Card, Chase Sapphire Preferred Card, Chase Freedom, and Chase Freedom Unlimited credit cards.
On top of earning points, there are also lots of other benefits for the Chase Ink Business Preferred card. If you use your card to book travel there is trip cancellation/interruption insurance. There is a roadside assistance plan. Rental car insurance is included. You also get protection for stolen or damaged cell phones. This is a great feature if you consider how important cell phones are to business and how easily a cell phone can be lost or stolen. If you use your credit card to purchase something new and it's stolen or damaged you are protected for up to 120 days. And any warranties up to 3 years are extended for an extra year.
As another benefit you can issue an employee card at no extra charge. You can set the employee card spending limit and their points go towards your total.
Versus Other Business Cards
When you calculate the value of points your business can earn on different cards, the Chase Ink Preferred Business card falls into the middle of the pack. The Starwood Preferred Guest Business Credit Card from American Express and the American Express SimplyCash Plus Business Credit Card will give you more reward points for business spending. Neither of them include an annual fee. However they can't compete with the 80,000 point sign up bonus if you spend $5,000 in the first 3 months. This $1,000 value (if redeemed through the Chase Ultimate Rewards program) would cover the annual fee for more than 10 years.
The Annual Percentage Rate (APR) for purchases are 16.99% to 21.99%. Sadly, there is no introductory APR promo rate. The rate you are offered depends on your credit score and other business info. The APR for a balance transfer is 16.99% to 21.99% (depending on your credit status). So using this card to finance a balance from another card through a balance transfer is not recommended. For Cash Advances, the APR is 25.99%. All of these are based on the Prime Rate and will vary with the market. Be aware that these rates can change at any time. You get a Default APR of 29.99% if you're late paying your monthly minimum. If that happens it will probably be your rate forever. In general the rates offered for this card are considered high for a product that requires an excellent credit score, so any company seeking to carry a balance or make a balance transfer should look elsewhere.
There are some requirements a business needs to fulfill in order to qualify for a Chase Ink Business Preferred card. In order to get approved, your credit report is reviewed. They will also look at info about your company, including financial info and other business info you provide when you apply. Different reviews will result in different offers. You might get a card with different rates and fees, or you might not get a card at all. If you do get approved the smallest amount of credit they'll offer is $5,000. For credit above $25,000 more info could be required to get approved. If you don't have excellent credit score you will likely be declined.
The Annual Fee for the Chase Ink Preferred Business Card is $95. The transaction fee for Balance Transfers is either $5 or 5% of the amount being transferred (whichever is greater). The transaction fee for a Cash Advance is $15 or 5% of the transaction amount (whichever is greater). These transaction fees are quite high (e.g. some cards have no annual fees). But one good thing is there's no Foreign Transaction fee.
There are also fees for Late Payments. You pay a penalty of $15 for being late if the balance is less than $100. It goes up to $29 if the balance is over $100 up to $250. If your balance is over $250 you pay $39 for being late. If you make a payment that gets returned you are charged $39.
One of the best features of the Chase Ink Preferred Business card is its bonus point offers. As a sign-up bonus you can get 80,000 points just for spending $5,000 in the first three months. The max value of 80,000 points is $1,000 if you redeem them through Chase's Ultimate Rewards travel booking service.
Every year you are eligible for 3 points for every $1 spent (within specific categories) up to $150,000 for each anniversary year. After that you get 1 point for every $1 spent on all purchases with no max.
Because the Chase Ink Preferred Business Card is quite new, there are not many reviews available from people who have been using it. But review sites all seem to agree that the biggest benefits are the bonus points. 80,000 sign-up bonus points if you spend $5K in the first 3 months is hard to beat. No foreign transaction fee is also something reviewers approve. Getting 3X your points for up to $150K spent in each anniversary year on common expenses is ideal for many businesses. The critics say that the transaction fees and rates are too high.
Redeeming Your Points
The value of your points depends on how to choose to redeem them. You can redeem them for cash at a value of 1 cent per point. So 100 points gets you $1. Or you can redeem them for travel through the Chase Ultimate Reward program for $.0125. That means they are worth 25% more when you redeem them for travel through Chase Ultimate Reward program. 100 points is worth $1.25. Think of this in relation to the 80,000 points sign-up bonus you earn as part of the intro offer. If you redeem the sign-up bonus for cash it's worth $800. If you redeem the sign-up bonus for travel through the Chase Ultimate Reward program it's worth $1,000.
Your points will never expire as long as your account status doesn't change. If it does change, for example if you fail to pay, then your points are immediately lost. The offer of 3 points for every dollar spent on the first $150,000 each anniversary year has restrictions. The spending has to fall into a business expense category. These include: shipping costs; buying ads; social media/ search engines fees; travel; internet/cable/phone service. They do not include office supplies, restaurants or gas.
Using Business Rewards
Points can be redeemed for cash. If you have an eligible account in the U.S. you can get a credit transfer or electronic deposit. The other options for using your rewards points are gift cards and business travel. But it seems a little strange that you can't use your points at an office supply store or for other regular business expenses. If a credit card issuer wants to attract businesses with points for business purchases, you would think the purchase of an office supply would be included.
Should you get the Chase Ink Business Preferred Credit Card? The answer to this question is pretty simple. If you don't think you'll carry a balance on your account, go for it. Pay in full each month and reap the rewards as either a cash or a travel reward. The rewards are worth it. But if you're going to carry a balance on your account and need to finance it, then look elsewhere for a card with a lower interest rate. The rewards are worth less than the extra interest and transaction fees you will pay (although the no Foreign Transaction fee is a plus if you do offshore business). It's also recommended to combine this card with the Chase Ink Business Cash card so all expenses can result in max rewards.