A new small business study shows many business owners use credit cards for easy bookkeeping.
According to a new survey, a full 90 percent of small business owners reported using business credit cards for business-related expenses. In fact, for 29 percent of the respondents, business credit cards are primarily used to keep business and personal expenses separate.
The online survey by payroll service SurePayroll questioned 279 small business owners on their credit card usage.
Among the other primary uses for credit cards, 22 percent of those surveyed cited business record keeping, 20 percent highlighted convenience, 18 percent applauded the rewards earned on purchases, and 10 percent indicated help with short-term cash flow issues. Other small business owners agreed that “all of the above” were most valuable when using a business credit card.
Meanwhile, survey results also suggest that small business owners are more likely to pay off their full credit card balance every month. SurePayroll’s data revealed that 63 percent of small business owners always pay the full amount on their business credit cards. Credit card user studies have shown that about 40 percent of U.S. cardholders pay their entire monthly credit card bills to avoid finance charges.
That discrepancy implies that small business owners are less likely to pay by credit card for purchases they will be unable to pay off in full by the end of their monthly billing cycle.
The president of SurePayroll said that while business owners carry fewer credit cards on average than most Americans do for personal use, business owners tend to use the credit cards they have for very specific purposes and are more careful about paying their entire balances.
Separately, interest rates and other credit-related terms were labeled the top factors to consider when applying for a business credit card by 46 percent of survey respondents. Cash back rewards were the leading factor for 30 percent of respondents, while frequent flier miles were the primary inspiration for 20 percent of those polled when choosing a credit card.