SurePayroll Insights Survey: Business Owners Share Opinions on Perks and Pitfalls of Business Credit Cards

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SurePayroll's survey finds that most small business owners pay off credit card balances in full, and value cards for low interest rates.

Try to get everything from the same bank. Loyalty can get your interest rate lowered.

A recent survey by online payroll service SurePayroll confirms that when it comes to separating business and personal finances, plastic pays off for small business owners.

Survey responses indicate that 90% of small business owners use credit cards to make business purchases, and that most pay off balances in full by the end of each billing cycle.

The largest group (29%) of surveyed business owners cited "to avoid co-mingling business and personal expenses" as the primary reason for using a business credit card.

Other respondents considered business credit cards most valuable for helping with business record keeping (22%), convenience (20%), providing rewards for purchases (18%) and helping with short-term cash flow issues (10%). Additional small business owners stated that "all of the above" were most valuable in using a business credit card.

"The survey confirms that most small business owners value a clear line drawn between business and personal financial matters," notes SurePayroll President Michael Alter. "Even though business owners, on average, own less credit cards for business than most Americans own for personal use, they tend to use the cards they have for very specific purposes and are more conscious about paying them off in full."

  • Business owners less likely to accumulate interest fees -

While credit card user studies report that around 40% of Americans pay off credit card bills in full each month to avoid finance charges, SurePayroll's survey indicates that 63% of small business owners always pay the full amount on their business cards. The results suggest that small business owners are more hesitant to charge purchases they will not be able to pay off in full by the end of each billing cycle.

When asked to provide their general thoughts about business credit cards, survey respondents offered advice such as "Pay them off in full or don't use them," and "Make sure you only spend what you can pay off monthly."

31% of surveyed business owners replied that they occasionally pay the full amount, while only 6% responded that they never pay bills in full.

  • Interest rates key to business owners, but full payment means less profit for credit card companies -

46% of survey respondents cited that interest rates and other credit-related terms constituted the most important factor to consider when applying for a business credit card.

Although business owners regard interest rates as a key consideration, their general commitment to paying bills in full suggests they might not serve as credit card companies' most desired customers.

"The fact that business owners view interest rates as so important, and at the same time are diligent in paying off bills to avoid fees, means that credit card companies are probably not making a lot of money from small business customers," Alter noted. "Small business owners usually have to be very money conscious, and as a result do all they can to avoid accumulating debt."

Additional small business owners considered cash back rewards (30%) and frequent flyer mile rewards (20%) as the most attractive features. Other respondents specified additional reasons - including acceptance by vendors, no annual fee, having the option to switch between different types of rewards and the ability to automatically pay full balances when they are due - as the most important considerations.

  • Most owners find one card sufficient -

While various studies have found that the average American owns four-to-eight credit cards, SurePayroll's survey indicates that small businesses generally need only one.

When asked how many business credit cards (including store-branded cards, such as a Staples or Office Depot card) they owned, 41% of respondents reported that they owned a single card.

The second most frequent answer was two, reflecting 33% of responses. 10% responded with three and 16% with four or more.

  • Additional findings -
  • 60% of respondents reported that credit cards were not their only source of institutional debt financing.
  • 86% believed their credit limit was high enough.
  • 90% reported that most of their vendors and suppliers accept credit cards.
  • 28% indicated they use a debit card to make business purchases, suggesting that credit cards would be used by even more small business owners if it were not for the convenience and record-keeping abilities of debit cards.

Surveyed business owners offered additional tips and comments to fellow entrepreneurs regarding the use of credit cards to make business purchases. Advice offered by business owners included the following:

  • "Try to get everything from the same bank. Loyalty can get your interest rate lowered."
  • "Don't carry more than two cards - it's too easy to get in over your head with the debt that comes so quickly."
  • "The primary need for credit cards is for business travel. Airline flights, hotels, etc. are difficult without credit cards. It is also helpful to keep business expenses separate from personal expenses to maintain integrity in accounting records."
  • "Using credit cards helps with record keeping and makes it easy to make purchases when cash flow is low."

About SurePayroll:

Privately held SurePayroll is America's fifth largest full-service payroll provider and the nation's largest online full-service payroll provider. SurePayroll is passionate about small businesses and their payroll. They are dedicated to providing an extremely friendly and simple payroll experience -- at a price small business owners can afford.

In addition to providing payroll services directly to small business, SurePayroll also provides a private-label payroll service that allows SurePayroll's numerous partners to offer payroll processing to their small business clients. Business partners include ABN AMRO, Pitney Bowes, and MasterCard. SurePayroll processed nearly $3 billion in employee and contractor payroll payments in 2006. For more information, visit


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Frank Krolicki
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