Cash Back Cards for Business: How do they work?
Cash back credit cards can be a great way to get a little money back on every transaction you make with the card. However, understanding how company cash back rewards operate is critical to getting the most out of them. Continue reading this blog to learn in-depth about how cash back credit cards work and some of their benefits.
What is Cash Back?
Cash back refers to a credit card benefit in which the cardholder receives a portion of the money spent, back to his account. The credit cards issuers reward points, frequent flyer miles, or a monetary reward to the cardholders for using their card. This monetary amount, also known as cash back or cashback reward.
How do Cash Back Credit Cards Work?
The card issuer reimburses a percentage of the amount spent to the cardholder for the purchase made using Cash back credit cards. It’s almost like we get a small refund each time we use the card. Business cashback percentages are usually between 1.5 and 2% but can be higher depending on the card issuer. Unlike a discount, we cannot apply cash back instantly. Cashbacks are earned monthly and are available on credit card’s monthly statement until it is claimed.
The 3 types of Cash Back cards:
Flat-rate cashback cards, also known as simple cash back cards, return the same percentage of cashback on every purchase made using the credit card. For example, the card owner buys groceries, accessories, and something else. The cashback percentage is the same for all three purchases.
Category bonus cards
Throughout the year, rotating/ bonus category cards give incentives for various spending categories. You may be able to choose your categories on some cards. The credit card issuer determines the categories on other cards. These categories change on a regular basis.
The issuer sets the categories every quarter. A few months before the new quarter, the categories are released. If you can top out the spending categories each quarter, you can get 5% back, but it takes some effort. Purchases that do not qualify for a bonus may be eligible for a flat cash back rate.
Tiered rewards cards
Unlike flat-rate cards, tiered rewards cards offer different cash back percentages based on the different spending categories. The customer must consider which card to use with each transaction to maximize their profits. Also, s four-digit number called a merchant category code helps credit card issuers figure out which purchases are eligible for cash back benefits. The merchant category code has allocated a code for each credit card transaction. They assist issuers in determining which level of the cashback benefits the particular purchase qualifies for.
Benefits of Cash Back Credit Cards:
- Like any other card, cash back cards have certain features, including fraud prevention and digital tools that help the user keep track of the funds.
- The cashback reward program are easy to understand. Also, cashback rewards are helpful in paying back the credit card bills at some point.
- The cash back reward programs are straightforward and guaranteed. A certain percentage of cash is repaid for every dollar spent. There is no need of worrying about the cashback reward value depreciating, leaving the points less valuable than before.
- Cash back cards might help in rebuilding the credit history and increasing the credit score if used responsibly.
- Cash back rewards usually don’t have an expiration date, so they can be accumulated over time (if they aren’t automatically applied as statement credits). Even though, it’s usually a good idea to double-check the card’s terms and conditions.
Not A Rapidcents Merchant?
We hope this article helped in realising the benefits of using cashback cards. Well, at RapidCents we offer cashback coins, known as the RPS Token. There are so many tokens available in the market, and among them, if you choose RPS Token; it will keep your business ahead. This new crypto token is completely backed by Rapidcents that is a popular merchant processor. If you become a Rapidcents Merchant, you will get 100% cashback of the transaction fees in the form of RPS Token.
This is a kind of initiative to give back the merchants that will process the business transactions through Rapidcents. As of now, there are no other merchant processors that offer crypto coins for processing transactions through their platform. Therefore, this is completely a unique initiative by Rapidcents. So, if you want to take advantage of the best new tokens, you can become a Rapidcents Merchant.