Plenty of credit cards and charge cards are designed to help small business owners earn rewards for their purchases. However, the value of the card you choose depends on the specific needs of your operation.
The Business Gold Rewards Card from American Express OPEN rewards both travel and business-related purchases. And, because it’s a charge card, no preset spending limits or interest charges are imposed as long as you pay your balance in full each month.
- Sign-up Bonus. If you spend $5,000 within your first three months, you are awarded a bonus of 25,000 Membership Rewards points – redeemable for $250 in gift cards.
- Fees. The annual fee of $175 is waived the first year. The foreign transaction fee is 2.7%, and there is no balance transfer option with this card. There is an annual fee of $50 for the first additional Gold card you get, but extra cards after that have no fee. The late payment fee is $35 or 2.99%, whichever is greater, and the returned payment fee is $35.
- APR. There is no APR because the American Express Business Gold Rewards is a charge card, requiring payment in full each month.
- Rewards Program. You get 3 Membership Rewards points per dollar spent on airfare purchased directly from airlines and 2 points per dollar spent on U.S. purchases of advertising (online, television, or radio), shipping (courier, postal, and freight), gas stations, and purchases made directly from select computer hardware, software, and cloud computing providers. You can also earn 1 point per dollar on all other purchases. However, each of the five bonus categories have a cap of $100,000 per year (per category) in purchases, with computer hardware, software, and cloud computing counting as one category. When you reach the cap, any additional purchases earn one point for each dollar spent.
- Redeeming Rewards. Membership Rewards points are worth the most – one cent each – when redeemed for gift cards. You can redeem for merchandise – a Vitamix blender valued at $649.95 is available for 129,990 points – and for airfare, hotels, and vacations through the American Express Travel website. You can also transfer your points, at a ratio of one-to-one, to frequent flyer and hotel loyalty programs such as Delta SkyMiles and Choice Privileges.
- OPEN Savings. The American Express Business Gold Rewards charge card includes access to the OPEN Savings network. When you shop with retailers such as FedEx, Hertz, and HP, you can earn up to 4 additional Membership Rewards points or get up to a 10% discount credited back to your statement.
- Special Event Offers. American Express claims to offer cardholders the best seats for thousands of events around the world. They also reimburse cardholders for up to $1,000 in ticket costs if they are unable to attend an eligible event. This benefit is limited to two events per year and is not available to residents of New York.
- Purchase Protection. This card includes a range of valuable purchase protection services. American Express adds an additional year to eligible product warranties, and reimburses customers up to $300 per item if a retailer will not accept a return. Purchases are also covered for theft or accidental damage for 90 days after purchase.
- Travel Insurance. Cardholders receive coverage for carry-on luggage and airline checked baggage fees when the card is used to purchase travel. Cardholders also receive roadside assistance services valued at $50 per occurrence, up to $200 per year.
- Decent Sign-up Bonus. The sign-up bonus is worth $250 in gift cards, a good-sized bonus if you plan to make at least $5,000 in business purchases.
- High Cap. The cap of $100,000 per year in purchases in each of the bonus categories is higher than that of other business cards. The Chase Ink Plus card allows up to $50,000 per year, and the no-annual-fee Ink Cash card allows up to $25,000 per year.
- No Preset Spending Limit. The Business Gold Rewards is a charge card, not a credit card. Although you have the freedom of no preset spending limit, your balance has to be paid in full each month.
- Earn Points on Travel and Business. Earn rewards on airfare purchases and business expenses such as shipping and gasoline. Many business credit cards only award one or the other – airline cards typically only award flights purchased with a specific airline, and cards such as the Chase Ink Plus card only award purchases made at office supply stores, and on gasoline and hotels.
- Additional Cards for Employees. You are allowed up to 99 additional cards, but you only have to pay an annual fee for the primary card and the first additional one. This is helpful if you have staff members who also have business expenses, as it allows you to earn rewards on those purchases. It also helps you keep track of the business expenses and spending.
- Insurance and Protection. The majority of American Express cards include car rental insurance and travel assistance. However, American Express Business Gold Rewards goes beyond those coverages, offering 24/7 emergency, financial, legal, and medical assistance when cardholders are traveling more than 100 miles from home. The protection services can really pay off for those who utilize them.
- High Annual Fee. The annual $175 fee is among the highest of all such business cards. The Chase Ink Plus charges an annual fee of $95, while the CitiBusiness AAdvantage awards American Airlines flights and imposes an annual fee of $95. Both cards also offer significant sign-up bonuses, but carry annual fees almost half that of the Business Gold Rewards card.
- Marginal Cash Back Rewards. Membership Rewards points each have a cash value of one cent. Many cards return higher cash back rewards on some or all spending.
- Cannot Carry a Balance. One drawback of a charge card is that you don’t get a break if you have a rough month and want to make a minimum payment and carry a balance. Although it’s always recommended that you pay your balance in full to avoid interest, you don’t have that freedom with a charge card should you need it. If you do not pay your balance in full, you’re charged a late fee of either $38 or 2.99% of the past due amount, whichever is greater.
- Foreign Transaction Fee. Many American Express cards impose a high foreign transaction fee of 2.7%. If you travel abroad frequently, it is less expensive to use a card that does not charge a foreign transaction fee, such as the Chase Ink Plus or the Southwest Airlines Rapid Rewards Premier Business card.
The American Express Business Gold Rewards charge card has a competitive sign-up bonus and allows you to earn rewards on a wide range of business purchases. However, if you travel outside of the U.S. frequently or spend a lot in the bonus categories, you cannot earn enough rewards to cover the annual fee. In addition, if you need the option to occasionally carry a balance, you’d be better off with a no-annual-fee credit card.
The Business Gold Rewards Card from American Express OPEN is a great business card if you want to earn rewards for both business expenses and travel, rather than just one or the other. If you don’t earn enough points or meet the spending threshold, however, you’re going to have a difficult time justifying the annual fee.
3.5 out of 5 stars: The annual fee is quite high, especially if you aren’t able to meet the spending threshold for the sign-up bonus or spend enough to earn the Membership Rewards points needed to cover it.