Small Businesses Prefer Personal Cards For Expenses

Small and medium-sized businesses continue to rely heavily on personal credit cards for operational spending, despite the availability of business cards offering specialised rewards and financial management tools.

Research from PYMNTS Intelligence in collaboration with Mastercard indicates that adoption of dedicated business credit cards remains limited among many smaller firms. The study found that 39% of small and medium-sized businesses do not use a business credit card, while around 30% rely on personal credit cards to cover company expenses. The trend is particularly pronounced among micro businesses generating less than $150,000 in annual revenue, where only about one-third report using business cards.

Even among larger small businesses the pattern persists. Among firms generating more than $1 million in annual revenue, 16% still avoid business credit cards entirely and 27% continue to use personal cards for business purchases. With approximately 36 million small businesses operating in the United States and contributing roughly 43.5% of national GDP, the findings highlight a significant gap between available financial products and their adoption.

Industry specialists say the challenge for issuers is not necessarily the quality of rewards. Many small business cards already offer strong incentives such as cash-back programmes and large sign-up bonuses. Some cards provide unlimited cash-back rates or bonus earnings in categories linked to common business spending. These benefits are partly supported by higher interchange fees charged on business card transactions.

However, personal credit cards have increasingly adopted similar benefits, narrowing the perceived advantage of dedicated business cards. Over the past decade, premium features such as travel perks, insurance coverage and reward programmes have become common across consumer cards, reducing the distinction between personal and business offerings.

For many small business owners, particularly sole proprietors or companies with few employees, the practical difference between household finances and business spending remains limited. As a result, maintaining a separate business card can appear unnecessary unless it offers clear operational advantages.

Survey findings suggest that some features could improve adoption. Nearly half of surveyed businesses said they would pay for a business card that allows flexible payment windows aligned with income cycles, while many also prioritise stronger fraud protection and cybersecurity tools.