Why do Small Businesses Opt for Business with Credit Card?

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cards for Business » Why do Small Businesses Opt for Business with Credit Card?

Why do Small Businesses Opt for Business with Credit Card?

Add to Favorites:

If a credit card is used wisely, it could prove to be a very useful tool in financial management. We have previously dealt with many issues regarding the drawbacks of using a credit card. However, there are other reasons for owning a credit card and using it responsibly, especially in small businesses. For small businesses, doing business with a credit card could be a boon and a lifesaving tool especially in a financial crunch.

Doing business with credit cards

As per a survey done in 2009, most small businesses use a credit card to do their business financing. Over 50% of the respondents admitted to using credit cards for their financial needs. Only a fraction (5%) of small business owners seemed to use either an SBA loan and only a mere 1% managed without any financing in the previous year.

The statistics show that at least 23% of the owners of small businesses used just one credit card and a majority of at least 77% admitted to having used more than one credit card and around 22% admitted to using more than four credit cards.

Since most of them do business with credit cards, small businesses would suffer if they did not have capital from credit cards as they would be trapped without funds. This would in turn hamper their prospects in regards to expansion or growth. If they curtail credit card usage, small businesses feel that they might have to downsize their number of employees.

Choose the right card

Business credit cards might be of relevance to many, but still it is wise to do some research and get the right credit cards at the best terms possible. There are some credit cards that offer 5% cash back on all purchases, which are mainly office supplies and no annual fee, as well as a lesser cash back option for other purchases as well.

If one has a good credit rating, then all credit cards would come with some of the best offers. However, with disciplined usage of the credit card one could reap the benefits, but if care is not taken with the usage there could be negative fallout from using the credit card.

It is estimated that over 2/3rd of small businesses use credit cards extensively, while only around 40% use them exclusively. It is wise to use small business credit cards instead of personal credit cards, but one must be prudent with the usage and management.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

Posted: June 21, 2017

Whether you are married or not, we all agree that marriage is incredibly important for a person. It signifies the beginning of two people as a team, as a family, of a long commitment. It is a newly born union and the sign of your choice, ... Continue reading
How To Choose The Best Credit Card For Everyday Spending

How To Choose The Best Credit Card For Everyday Spending

Posted: June 21, 2017

When you reach for your wallet to pay for groceries, gas, dinner out, or any other everyday purchase, are you searching for cash, a debit card, or a credit card? Many people hesitate to charge this type of everyday spending to a credit ... Continue reading
How to Save Money. Best Credit Card Deals and Tips.

How to Save Money. Best Credit Card Deals and Tips.

Posted: June 20, 2017

We all've been through or may find ourselves in such an emergency when money is needed immediately. Lucky you are if you have savings for unexpected expenses. If not, it's never too late to start saving money. There are different ways to ... Continue reading