Key Podcast Highlights

How Many Small Businesses Use Credit Cards?

  • About 70 to 80% of small businesses use credit cards.

What Are Some Tips for Using Credit Cards in Your Business?

  • Have a plan for using your card. For example, if you have foreign suppliers and arranging for bank transfers is complicated, a credit card might be a good option for paying them.
  • Don’t use your credit card for long-term financing.
  • Pay off your credit card each month or at least after two months.
  • Your credit card is also a good accounting tool for your small business. You can request statements that breakdown your expenses in a way that you can easily use.
    • A lot of credit cards will integrate with your bank and other popular accounting systems as well.

What’s the Best Credit Card Deal?

  • Choose cash back over points.
  • Use NerdWallet and Credit Karma to help you compare major credit cards out there.


The views and opinions expressed on this podcast are for informational purposes only, and solely those of the podcast participants, contributors, and guests, and do not constitute an endorsement by or necessarily represent the views of The Hartford or its affiliates.

You’re listening to the Small Biz Ahead podcast, brought to you by The Hartford.

Our Sponsor

This podcast is brought to you by The Hartford. When the unexpected strikes, The Hartford strikes back for over 1 million small business customers with property, liability, and workers compensation insurance. Check out The Hartford’s small business insurance at

Gene (00:02):

Hey everybody, this is Gene Marks. Welcome to another episode of the Hartford’s Small Biz Ahead podcast. This week I would like to talk to you about credit cards and using credit cards in your business. Listen, for starters, I want you to know, if you are using a credit card in your business, there is nothing wrong with that. Sometimes people think there’s like a stigma about using credit cards and there’s really not. There was a study that was done by, I think it was JP Morgan Chase or Citibank a few years ago that showed like 70 to 80% of small business owners use credit cards in their businesses. So I don’t want you to think that, that using a card is such a bad thing. It’s a good thing, and it can be very helpful. Credit cards can definitely provide, a good tool for cash management in your business if you use them the right way.

Gene (00:54):

So let’s talk about using credit cards the right way, okay? For starters, if you’re gonna have a credit card, you should definitely have a plan for using it. Like you don’t get a credit card just for credit card’s sake, and you certainly don’t run up a lot of debt, obviously, but most of my clients that use their credit cards, well do so because they’ve, they’ve got a reason to have it. For example, maybe you’ve got foreign suppliers that are outside of this country and it’s complicated and expensive to arrange for bank transfers to pay them. So making credit card payments to those suppliers makes a lot more sense. It’s just a lot more easier to do. Maybe you make a payments to suppliers that are a bigger amount, or that the suppliers want the payment immediately.

Gene (01:37):

So you have a credit card to do that. I mean, perhaps you’re in a business where people need money upfront or they need money right away, and a credit card is the fastest way to get money into their hands. I have one client who used a credit card to put a down payment on a lease. You have to pay the first month’s payment so we could secure it before then converting it into a longer lease deal and converting the credit card, paying that off. It’s done from a cash management point of view and for immediate needs, it can actually work. And the same thing for working capital. I mean, if you’re in the kind of business where you are buying something and then it takes you, two months to turn it around and sell it, but you need to have the inventory on hand and you don’t have the cash available to do it, but you know you’re gonna sell it.

Gene (02:24):

Well, using your credit card is… could be an option. Now, that doesn’t mean that traditional bank financing isn’t better. In many cases it is better. It’s certainly less expensive, from an interest rate standpoint. But look, I mean, with the prime rate the way it is, I mean, a lot of us can’t get traditional bank financing or working capital loans and credit cards are the next best thing. Just know, of course, it’s obvious credit cards have a very high amount of interest. It’s gonna be anywhere from 18 to 30% interest, even more depending on your credit history. So credit cards are not meant…

Gene (02:59):

For long-term financing. That 18 or 20% interest rate that you would pay if you don’t pay off the balance, that’s an annual rate. So I have clients that will get a credit card, will carry a balance over a month or maybe two months. It’s a little bit more expensive to do that, but then they do pay it off. It’s easier to do it. Or they might not have any choice because they don’t have other means of financing. So, just because the interest rate is high, it’s not something you should be avoiding. I mean, it’s not a long-term thing, but it can absolutely be a good cash management tool. It’s gonna cost you a little bit for that money. But if you’ve got a way of taking that money and making money off it, you’re buying some inventory or a piece of equipment or doing something that’s gonna be profitable to you, where the expense of that extra interest just figures in to your profits, then it might make sense.

Gene (03:49):

So it’s not something you should avoid doing. I mean, it might be your only choice. Just, have a plan for using it and just making sure that you really control your outstanding balance. Really try to pay it off every month or at the very least, you can let it go two months. I have clients that do that. The longer your balances are outstanding, then the more financing fees you’re gonna pay. And suddenly, what you use that credit card for becomes not as profitable. The other thing I could tell you about credit cards is they can be a good accounting tool, particularly if you’re running a business where, you don’t have great bookkeeping or bookkeeping resources or whatnot. Credit cards today, you can request, they come with annual and even more frequent statements.

Gene (04:33):

So they’ll break down your expenses in such a way that an outside accountant can take that information and easily use it as opposed to have everything stuffed in a shoebox. A lot of credit cards, integrate with popular accounting applications. They’ll integrate with your bank. They’ll integrate with expense management systems. So these are all things to consider when using your credit card, is that the reporting side of it might actually help you, might actually provide a better accounting and better categorization of your costs as opposed to freewheeling with checks or cash or whatever out there that might not have as good tracking from an accounting standpoint. Okay? One final thing about credit cards. People ask, what’s the best credit card deal? Well, there’s a lot of different sites out there that will help you search for a credit card.

Gene (05:19):

NerdWallet is a great one. Credit Karma is another one. And they compare all the major credit cards that are out there. Let me just give you a little bit of a tip. Okay? Cash back is always better than points. I know we like to get points and listen, I like to get points. Because then you can trade ’em in for airline miles or hotels or gifts or whatever. Fine, that’s great. But if you get a credit card that’s like 2% or 5% cash back, that’s cash that comes right back. Points are kind of arbitrarily determined. The cash equivalent by the credit card company, where they’re partners. So…

Gene (05:57):

I’m gonna bet that they’re probably making this calculation not all the time with your best interest in mind. The other thing, bear in mind when you talk about cashback, I mean, there were a lot of great cashback cards for 2%. Amazon, if you’re a Prime member, they have a 5% cashback card for Prime members. You connect it to your Amazon account and whatever you’re buying on Amazon for your business or personal, it’s basically a 5% discount on everything you buy from Amazon. I know a lot of us buy stuff from Amazon. So, the bottom line is when you have a credit card, it’s usually better to have cash back over points. Okay? That’s my general rule of thumb advice. The only other thing I could say about cashback versus points as well is that I do have clients that accumulate points and then convert them into gift certificates or travel vouchers or dining certificates for their employees or for their customers.

Gene (06:47):

And that’s cool. So, okay, you might not be getting the full value of it, but at the same time, if it’s a good way for you to sort of accumulate perks and then because it’s sort of outta sight outta mind, you then convert it into something that your employees could enjoy, your customers, why not? I mean, it’s not a bad way to do that. So let’s sum up my thoughts on credit cards for you. Okay. First of all, it’s okay to have a credit card. Most small businesses do it’s okay to use your credit card. Even if you’re using it for financing, you can use it. It’s a good tool. Have a plan though, if you’re gonna get it, okay? Use it for foreign purchases, use it for big purchases. Sure, use it for working capital. As long as, you’re working that float and then you know if you’re gonna use it, it’s gonna turn into some type of return on investment.

Gene (07:31):

Pay it off every month or every other month. Don’t use a credit card for long-term financing because it’s at the rate of interest. It’s just, it’s not a good deal. So, you gotta make sure that you’re paying that thing off every month or every two months for sure. Okay? Remember that credit cards can be a good accounting tool. Leverage the reports, leverage the integration with your bank and your accounting system. Could provide you with help that a bookkeeper, you’d have to pay a bookkeeper for. So look into that as well. And finally, general rule of thumb, if you’re gonna get a credit card, get the cashback deals, not necessarily the points. I think cashback deals, almost always is a better deal. Because that’s just a straightforward calculation. Again, you can evaluate credit cards on NerdWallet or Credit Karma.

Gene (08:12):

There’s other sites out there, but those are two that I like the most. So there you have it. My thoughts on credit cards for this week. You have been listening to the Hartford’s Small Biz Ahead podcast, and my name is Gene Marks. I hope you have been enjoying this and got some good advice here. If you need any tips or advice or help in running your business, please visit us at or Again, my name is Gene Marks. Thanks for listening. We’ll see you again next week with another tip to help you run your business. Take care.

Download Our Free eBooks