Study: 60 Percent of Business Owners Use Personal Credit for Business Expenses

A new report by TowerGroup estimates that two-thirds of all small business owners use credit cards for business expenses. Of these, 60 percent use personal cards (exclusively or in conjunction with business cards), while 40 percent use dedicated business cards only. Given that the small-business sector employs approximately half the private-sector workforce and is expected to continue to grow steadily, the US small-business credit card market, dominated by American Express for many years, is a key growth segment for many bank card issuers.

In the next few years, credit card issuers will focus on competing for established business cardholders as well as migrating consumer cardholders who use personal cards to pay for business expenses. However, small business cards provide only a handful of features above and beyond those of personal cards. TowerGroup believes that issuers will need to enhance rewards and/or other card features to motivate increased small business acquisition and usage.

TowerGroup is the world’s leading research and consulting firm focused on the global financial services industry. Continuous Advisory Services (CAS) deliver a complete view of the trends and issues financial services executives face as they make critical business and technology decisions.

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