SurePayroll Insights Survey: Business owners share opinions on perks and pitfalls of business credit cards

CHICAGO — April 18, 2007 — A recent survey by online payroll service SurePayroll confirms that when it comes to separating business and personal finances, plastic pays off for small business owners.

Survey responses indicate that 90% of small business owners use credit cards to make business purchases, and that most pay off balances in full by the end of each billing cycle.

The largest group (29%) of surveyed business owners cited “to avoid co-mingling business and personal expenses” as the primary reason for using a business credit card.

“The survey confirms that most small business owners value a clear line drawn between business and personal financial matters,” notes SurePayroll President Michael Alter. “Even though business owners, on average, own less credit cards for business than most Americans own for personal use, they tend to use the cards they do own for very specific purposes and are more conscious about paying them off in full.”

- Business owners less likely to accumulate interest fees -

While credit card user studies report that around 40% of Americans pay off credit card bills in full each month to avoid finance charges, SurePayroll’s survey indicates that 63% of small business owners always pay the full amount on their business cards.

Only 6% of business owners responded that they never pay bills in full.

- Interest rates key to business owners, but full payment means less profit for credit card companies -

45.6% of survey respondents cited that interest rates and other credit related terms constituted the most important factor to consider when applying for a business credit card, making it the most popular response.

Although business owners regard interest rates as a key consideration, their general commitment to paying bills in full suggests they might not serve as credit card companies’ most desired customers.

“The fact that business owners view interest rates as so important, and at the same time are diligent in paying off bills to avoid fees means that credit card companies are probably not making a lot of money from small business customers,” Alter noted.

- Most owners find one card sufficient -

While various studies have found that the average American owns four-to-eight credit cards, SurePayroll’s survey indicates that small businesses generally need only one.

When asked how many business credit cards (including store-branded cards, such as a Staples or Office Depot card) they owned, 40.5% of respondents reported that they owned a single card.

The second most frequent answer was two, reflecting 33.3% of responses.

- Additional findings -

- 86% believed their credit limit was high enough

- 90% reported that most of their vendors and suppliers accept credit cards

- 28% indicated they use a debit card to make business purchases, suggesting credit cards would be used by even more small business owners if not for the convenience and record-keeping abilities of debit cards.

Additional tips from surveyed business owners include:

- “Try to get everything from the same bank. Loyalty can get your interest rate lowered.”

- ”Don't carry more than two cards - it's too easy to get in over your head with the debt that comes so quickly.”

- “Using credit cards helps with record keeping and makes it easy to make purchases when cash flow is low.”


About SurePayroll:

Privately held SurePayroll is America's fifth largest full-service payroll provider and the nation's largest online full-service payroll provider. SurePayroll is passionate about small businesses and their payroll. They are dedicated to providing an extremely friendly and simple payroll experience —at a price small business owners can afford. For more information, visit www.surepayroll.com.