Cash back vs points: how much are your corporate card points actually worth?

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There's no denying it—expenses are just 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 company growing.

So, where do you begin? Corporate credit cards are typically the most logical choice.

These days, it's not hard to find a corporate card with one of many perks, from statement credits to welcome bonuses, travel rewards, airport lounge access, and more.

When you've sorted through it all, and it's time to finally decide on which corporate card to get, your decision basically boils down to choosing between two reward types: cash back or points.

But given that each has its own benefits, it's easy to understand why choosing between the two categories may not be as straightforward a choice as it seems.

The reality is that there are many factors to consider when choosing the best corporate card for your team, and landing on the right, most impactful rewards program can directly impact your bottom line.

When you dig a bit deeper, one comes out on top as the right choice for many scaling businesses.

Understanding the true value of credit card points

Credit card rewards were first introduced in the 1980s and were often tied to airline credit cards with frequent traveler 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 or the one that provides the most value.

How much are you traveling?

Business owners tend to be attracted to the prospect of collecting points every time they book eligible travel. But there’s a lot to consider before making the jump.

Points can still be a great asset for business teams that travel frequently. You can redeem your points balance for a host of relevant travel purchases including flights, accommodations, rental vehicles or even upgraded travel experiences.

Depending on the card and loyalty program, you may also find opportunities to earn 2X to 5X points on bonus categories, such as booking with specific hotel partners, helping you achieve a desired reward faster.

But this option may be a no-go if you don’t travel much. So, if you aren’t a travel-first business, the value of points may just never become apparent.

The downsides of being boxed in

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.

Not only that, but when you’re focused on scaling your business early on, making gift card purchases or ad hoc Amazon orders to redeem points may not be at the top of your priority list. 

You could also easily end up in a situation where you have no upcoming travel, lots of points accrued, and only a handful of things with no apparent business value to redeem them for. Not ideal.

What are your points really worth?

Consider this: while racking up tens of thousands of points may seem like a worthwhile endeavor, even if you travel a lot, it’s worth thinking about how much these points are actually worth.

Unlike cash back, which tends to have a flat monetary value, the true value of a reward point can commonly equate to 0.8% or less in actual cash back.

Why cash back credit cards are a better choice for businesses

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 straightforward but significant:

• Cash rewards can be applied toward any type of future purchase. Cash back programs give you more autonomy to make spending decisions most beneficial to you, knowing that you’ll be rewarded for expenses you would’ve been making anyway.
• Unlike points, you won't run into any redemption restrictions such as brand requirements or blackout dates. The cash back you accumulate is money in your pocket, with no restrictions on what you can use it for.
• Similarly, even if you decide to use your rewards on business travel, cash back gives you greater flexibility and more redemption options than points. You won’t be locked into booking travel with specific airlines, or travel portals.
• Unlike rewards, cash never expires, so you can hold onto what you accumulate for as long as you need.

Now that we've identified cash back as the best 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 most popular spending 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 $25,000 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 cash back on all eligible purchases 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 if you require a large number of cardholders
• 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

What does your business need?

The debate between cash back and points ultimately comes down to this: if you’re going to travel a lot over the next year, then the benefits of accruing points may seem obvious.

But even so, if you prefer the flexibility of booking travel the way you want to, without being limited to specific travel partners, portals, or time periods, then cash back is the way to go.

Reinvesting with your accrued 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—whether it’s to book travel, car rentals, or office supplies—and earn even more cash back for your business.

Going the cash back route? Choose Rho

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.  

Learn more about Rho today.

Terms and conditions apply.

Rho is a fintech company, not a bank. Checking and card services provided by Webster Bank, N.A., member FDIC; savings account services provided by American Deposit Management Co. and its partner banks.