46% of SMBs Using Credit Cards Are Better Off Now Than a Year Ago

The latest J.D. Power U.S. Small Business Credit Card Satisfaction Study finds that 46% of small businesses that use credit cards say their financial state is better than it was a year ago, with most—49%—describing it as about the same.

The study delved into how small businesses use credit cards, with just 5% saying they are worse off than in 2023.

Still, there’s potential trouble among SMBs and how they use credit cards. According to J.D. Power, 51% of small businesses are categorized as financially unhealthy, with the continuum ranging from healthy to vulnerable. Of these, 61% carry revolving debt on their business credit cards and 63% are borrowing with these cards to fund operating expenses.

That creates a bifurcated economy for SMBs, John Cabell, J.D. Power’s managing director of payments intelligence, says in a statement. While half are doing well, the other half are not.

“Among those that are struggling, business credit cards have been a lifeline, but the buildup of revolving debt they are accumulating should raise some concerns,” Cabell says. “Notably, overall satisfaction scores and perceived value of card benefits and rewards are lower among small businesses seeking credit. This gap among businesses that rely on cards the most is putting brand loyalty and advocacy at risk.”

Twenty-six percent of these small businesses are credit-seeking heavy users of credit cards and payment plans, J.D. Power says.

Released Tuesday, the study also ranks SMB satisfaction with their credit cards. American Express Co. had a score of 735, based on a 1,000-point scale, placing it at the top for the fourth consecutive year. Rounding out the top three were Citi at 707 and Wells Fargo at 706. The study average was 708.