Square Credit Card Adds 3% Cash Back, But There’s a Catch

Square’s revamped credit card offers small businesses 3% cash back on bill payments, but there’s a catch in the math.

The fintech company announced this week that the Square Credit Card now offers 3% cash back on transactions made through the company’s bill pay service. All other purchases come with 1.5% cash back.

Cardholders have options when it comes to how they want to redeem the rewards they earn. They can choose to have cash deposits go into their savings account with Square, or they can opt for free processing or statement credits, the company said in a press release.

In addition, Square said cardholders can use Bill Pay to pay eligible vendors by bank transfer or check, even when those vendors do not accept cards directly.

In addition to 3% cash back on bill pay transactions, the Square Credit Card offers a rate of 1.5% back on other purchases.

Cardholders should always read, or at the very least skim through, disclosures and program terms and conditions before using a credit card. That can be a tedious process, but becoming familiar with the details of a card’s offerings can help a cardholder avoid unwelcome surprises down the road.

A page on Square’s website about sending payments through its bill pay service reveals that making a payment via a credit card, including the Square Credit Card, comes with a 2.9% fee.

The advertised 3% reward nominally exceeds the 2.9% payment fee by 0.1 percentage point, although the actual value may depend on the program’s calculation and redemption terms. This could be an effective strategy by Square to get more sellers to use its cards for that purpose.

The Square card doesn’t come with an annual fee, foreign transaction fees, or late fees. And it features a dynamic credit line that can grow as a cardholder’s business expands.

Those features, along with the card’s cash back offering on bill payments, stand to be especially welcome additions for small businesses in 2026.

A new report from the U.S. Chamber of Commerce shows that a greater share of small business owners cited inflation as their chief concern in the second quarter of this year compared with the same period in 2025. The report draws on a survey of more than 750 owners of small businesses in the U.S. that was conducted in May and June of this year.

Only 69% of respondents reported having comfort with cash flow, down from 72% one year earlier.

Andrea Raj, Head of Product for Square Banking, noted in the press release that small business owners frequently have to make a decision between paying their vendors on time and retaining cash.

“Standalone solutions typically come with additional costs to bridge that gap, and even then, don’t solve the entire problem: you’re still spending your cash on hand, or putting it on a card not designed for small businesses,” Raj said.

“We built the opposite,” Raj added. “Pay vendors on time, keep cash longer, and earn the right rewards for it, all in one place and while saving on fees.”