Your business credit card provides an easy way to handle expenses for your company. It's a popular option with many UK businesses, offering several perks and advantages for employees.
It doesn't matter if you are a start-up company or a well-established corporation; a business credit card can be ideal. You can use one to control spending, to help with accounting, or to pay for an unexpected expense.
Business loans might be an alternative way of handling high expenses, but with business credit cards, you can handle the frequent costs of running a business.
Our financial experts have completed research into the most important business credit card statistics. In our article, we will share our insights into the most common trends we're seeing related to credit cards for UK companies.
Business Credit Cards: An Overview of Essential Statistics
Our financial experts have gathered the essential statistics and provided them in the overview below.
The overview contains statistics from 2020 to 2024. Here are the main statistics you should know about business credit cards:
📈 In 2022, more than 600,000 small or medium-sized businesses used a credit card to make purchases.
📈 Of the many financing option applications for businesses, only 5% were business credit cards in 2022. We can compare this with business loans, which made up 50% of applications in 2022.
📈 The use of credit cards for businesses as a finance option has declined from 39% to 26%. This decline took place between 2019 and 2022.
📈 Only 11% of small and medium-sized companies used a business credit card in 2022. This statistic shows a reduction of 7% from 18% in 2019.
📈 In 2023, more than 50% of businesses in the UK use a personal credit card and not a business credit card to aid cash flow management.
📈 48% of business owners use savings to fund their small business at some point, not a business credit card, although many seek funding.
📈 Business credit card spending, however, increased after the pandemic, and interest charges for these cards are approximately 26% (on average).
📈 The value of the UK credit card market is approximately £60bn per year, with £14bn of this value equating to interest amounts.
What percentage of businesses use business credit cards?
In 2022 and 2021, the percentage of small and medium-sized businesses that use credit cards was just 11%.
This statistic equates to more than 600,000 SMEs, specifically 605,000. There has been little change between these years, but the amount reduced from 990,000 in 2019.
It's likely given the cost-of-living crises in the last few years and soaring rates of inflation that this figure has increased since then.
How popular are business credit cards compared to other types of credit?
From the statistics, it's clear that business credit cards are not the only type of borrowing for UK businesses.
Many companies also use personal credit cards, and two in five businesses use a business loan to fund their business expenses.
When we look closely at the types of SMEs and their borrowing methods, 47% of SMEs with more than 100 employees use business or bank loans to aid cash flow management. On the other hand, 36% of smaller SMEs use business or bank loans for this purpose.
Our experts suggest that while credit cards are one business funding option, many SMEs consider loans a long-term option for larger purchases.
In 2021, 26% of businesses used bounce-back loans instead of business credit cards. During the same year, 24% used loans from the government for cash flow management purposes.
We noticed that one specific factor might explain why businesses used alternative means to borrow money. Many company owners may not be entirely convinced or confident that they will be accepted for many types of funding.
This observation might not apply to all companies, but the net confidence metric suggests that confidence fluctuates over time, which we will cover in more detail below.
Credit card Vs debit card transactions for SMEs
It didn't surprise us that the two main types of cards used for business expenses are debit cards and credit cards.
We reviewed this more closely so that sole traders and medium and large businesses can make comparisons.
Sole traders
Sole traders make more debit card transactions, which was true in 2018. In this case, 43% of sole traders use debit cards, compared with 31% using credit cards. They may be likely to use credit cards to manage their cash flow and keep personal expenses separate from business ones.
Medium and large-sized businesses
We found that the opposite was true for medium and large businesses, with 44% of medium and 44% of large businesses using credit cards. 27% of medium businesses used debit cards, and 21% of large businesses used credit cards by comparison.
Now, we can see that companies prefer control over their outgoing payments. We found that many businesses need the luxury of excellent timing when making payments to other businesses.
Although they may use direct debit or other methods, and 1.9 billion BACS direct credit payments were made in 2020, this doesn't stop them from making credit card payments in many cases.
What was the average credit card use in 2022?
Between the years 2019 and 2022, the average credit card use for small and medium businesses in the United Kingdom was 13.2%. Therefore, as mentioned, alternative funding methods such as loans or crowdfunding are more popular in many cases.
SMEs and personal loans: Key statistics
SMEs also seek other funding methods, such as government-backed startup loans, when borrowing money. In 2023, the government found that more than 100,000 businesses in the UK had used this funding option.
By the beginning of 2023, £941m had been granted to SMEs in the UK through the government. It shows that personal loans such as these are an alternative option compared with credit cards and may be suitable for long-term growth.
How confident are businesses they will be accepted for credit?
A score of 21 points out of the maximum 30 applied to those businesses surveyed about their likelihood of receiving a credit card in 2022.
When we compare this to 2021, we can see that this increased from the previous year. The fourth quarter of 2021 saw the net confidence score reach 19 points out of 30.
During pre-pandemic times, we can also see that 70% of businesses were confident that they would receive external funding.
The business credit card trends between 2018 and 2023?
We looked at the main business trends for credit cards since 2022.
Between 2018 and 2022, there were only 500,000 business credit cards in circulation. Approximately 80% (79%) of businesses get accepted for a credit card for their company, which tallies with the pre-pandemic confidence levels related to the likelihood of receiving external funding or credit.
Even though it's a relatively common option that many businesses consider, some are unsuccessful when applying for business credit cards. Approximately 8% do not receive a card, and the rest only receive a few of the cards they apply for.
Yet, the main trend to consider between 2018 and 2023 is that businesses are starting to rely on credit cards in 2023 and into 2024. A survey of 600 UK companies found that credit card use was the highest and most popular form of financing a company in 2023.
While business overdrafts and bank loans come in second and third, it's clear that credit cards are resurfacing as a popular option.
We conducted more research into these statistics to look at the specific companies that are using credit cards. We learned that the types of companies that are more likely to finance their business with a credit card are retail companies.
60% of these companies use their credit card to cover the cost, even though there is a risk of paying high interest when carrying a credit card balance.
In Scotland, two-thirds of retail companies surveyed use business credit cards as their primary means to handle company financing.
The reasons why UK businesses make credit card transactions
We can safely say that UK businesses use credit cards in many ways and for different reasons.
A few specific factors cause UK companies to make credit card transactions, and one important one is cash flow management. Nearly 50% of small businesses that use business credit cards to make transactions suggest that cash flow management is one factor that motivates this credit card use.
Backing this up, we can see that 60% of surveyed small and medium businesses in the UK suggest that working capital was another reason they might apply for external funding or credit cards. 27% need to invest in business growth with external funding, and 22% need to deal with recovery with credit cards.
We found that the debt levels of companies across the United Kingdom increased by 61% in 2023, including total credit card debt, with many businesses wanting to handle their credit control more effectively to avoid credit card debt.
Factors UK businesses consider when applying for credit cards
We can see that credit card accounts are popular, and UK businesses consider multiple factors when they make an application for a business credit card — not just the credit card grace period or interest free financing factors.
After all, 24% of companies suggest that business credit cards are their main business spending method, and they are motivated by different things.
Convenience, control, credit and security are four crucial factors that drive SMEs when choosing small business credit cards. We reviewed each of these factors and looked at the figures that reflect how important they are for businesses.
✅ Statistics related to SME credit cards: convenience and control
In terms of convenience, 87% of SMEs state that this is a key motivating factor that makes them use a credit card.
When we look at the control and credit factors, we see that 82% of SMEs value the control they have with spending and 62% consider credit and liquidity to be important reasons for using the card. These statistics, particularly the convenience figures, tally with the rise of contactless payments available with business credit cards.
🔒 Key facts on SME credit cards and security
Security benefits when making online transactions were also important to SMEs that used cards. Credit card issuance industry statistics show that although contactless payments have increased with credit card issuance, 68% of companies like the security benefits that come with these cards.
At the same time, UK businesses are concerned about security with business credit cards, which was noted in 2022. 19% of UK business cardholders chose to report any cybersecurity issues related to their credit cards to their banks or credit card provider companies, as stated by credit card industry statistics.
🔎 Key insights into SME credit cards and finance monitoring
Additional factors come into play when we look at the things that motivate SME credit card ownership. 49% prefer having insights into their outgoings and incoming finances, which they can do by looking at expense reports, transaction categorisation, and software integration features the cards offer them.
Considering future cash flow and predicting the business's future performance is also important to SMEs that use business credit cards, which 46% of companies suggested.
How has the pandemic changed business credit card spending?
April 2020 saw the lowest point of business credit card spending, but this has picked up in recent months and years. It has increased by 22% since 2020, even with increased inflation and interest.
The amount businesses are spending in 2024 is approximately 20% higher than pre-pandemic levels.
Now, interest, as stated, has increased by 26%. Yet the increases in business credit card use by companies located in the United Kingdom exceed those seen in Canada and the United States after the pandemic, with Canada seeing increases of 18% and the United States seeing increases of 20%.
Payments against account balances with business credit cards have increased 25% since pre-pandemic levels, which approximately equates to £2,000 for each business.
How have business credit scores fluctuated?
Business credit scores have fluctuated between 2020 and 2021.
Our research points to the pandemic as the main cause of the fluctuations. We can see that between March and May 2020, average credit score metrics took a significant dip for many UK businesses. They declined from 44 to 43.
We also looked at the subsequent months between 2020 and 2021. We noticed a continuous decline between June and September, from 45 to 41. However, when we look ahead to the latter half of 2021 and the beginning of 2022, we see that the credit scores begin to rise for many companies. September 2021 saw credit scores reach 44 again.
Now, these statistics apply to a general overview across all sectors. We completed more research into some other sectors, such as retail and travel.
The consensus shows that the credit scores of many retail businesses dipped in line with the general overview statistics and increased in the same way. We noticed that there was a sharp decline between May and December 2020, but the end of 2021 saw rises in these credit scores.
We found these statistics important as they align with the confidence levels of UK companies applying to receive funding. 2021 had a lower average credit score and low confidence levels (19 points out of 30). 2022 had increasing credit scores and increasing confidence levels (21 points out of 30).
The main business credit reference companies in the UK
There are a few popular credit-checking companies in the United Kingdom that check business credit scores.
The key options include Experian, Equifax and Credit Safe. We looked at a few statistics for these credit companies to see just how popular they are with UK businesses.
🏦 Experian
Experian serves more than 100 countries. It adds more than 750 million records from 600 up-to-date services in the United Kingdom. Experian is one of the most significant and largest credit report checking companies, and many UK businesses use it before they apply for business credit cards. It offers business credit score tools and data.
A 2020 survey found that 46% of 995 respondents found Experian to be the most trusted credit score rating compared to alternatives or competitors.
🏦 Equifax
Equifax processes 30 million plus credit score checks each month in the United Kingdom, which includes businesses. It has 55 million pieces of identity data, as per the website, and offers commercial insights from its vast database.
It, therefore, offers credit reports and additional services, which UK businesses use for a range of purposes, such as before they apply for business credit cards.
🏦 CreditSafe
100,000 businesses worldwide use CreditSafe to complete credit checks and financial performance checks. It offers credit score and limit services. In fact, this company completed 272 million credit reports in 2021, which increased by 23% from the year 2020.
CreditSafe's database is full of 365 million businesses from a range of 9,000 sources. It has 15,245,449 reports available for its UK clients, which includes businesses and consumers.
Average credit card spending: A closer look
When we looked closely at the average credit card spending numbers, we found that August 2023 reached £354. This figure corresponds to the monthly spend on average for each credit card in the United Kingdom.
What percentage of businesses clear their credit card balance?
In recent years, companies have become more consistent in paying their average credit card balances.
97% of medium-sized companies clear their credit card balance compared with 84% of micro companies.
We found that 86% of sole traders clear the credit card balance on their business cards, while 94% of small businesses clear theirs. These statistics applied to the late half of 2018 and the beginning of 2019. What we found in 2023, and 2024 was that the confidence businesses have in their ability to pay their average credit card debt has declined.
High confidence dropped three percentage points, from 48% to 45%.
Is credit Card delinquency increasing?
Two years after the excellent statistics showed that businesses could pay their average credit card balances, the figures declined. Year on year, between 2021 and 2022, credit card delinquency rates were on the rise in the UK.
The increase equates to 9.2% in terms of month-on-month statistics or 10.8% in terms of year-on-year statistics. These figures reflect the number of accounts that had a single missed payment.
We've noticed that credit card delinquency rates were on the rise in the United Kingdom during 2023, particularly during the first half of that year. We found that the rates of delinquency for credit cards increased by 35%, which applied specifically to SMEs during the first six months.
When we looked into this, we found that no sector was above these delinquency rates; the credit agreement fulfilments were poor all around, affecting all sectors. Some of the sectors affected the most were accommodation, food, and retail.
In 2023, £1,000 was the average amount of interest that UK cardholders had to pay to their credit card company, which included businesses. This average credit card debt amount applies to approximately 14 million people, which would take, on average, 25 years to repay.
We did notice that by the summer months, the rates of delinquency began to ease. It showed hope that the credit agreement fulfilments would rise in the last months of 2023 and the beginning of 2024.
Do SMEs use personal credit cards instead?
Our research into SMEs and credit cards showed that there are many businesses that use personal credit cards instead of business credit cards for their business expenses.
As stated in the overview, it's clear that at least 50% of companies have to use a personal card to keep their business running.
We learned that 45% of companies earning between £25 and £49.99m each year used a personal credit card in 2023 to ensure their business continued as required. This figure increases slightly when we look at businesses that earn between £50 and £99.9m. 47% of these businesses use a personal credit card to fund their company.
What are some credit card rewards businesses value?
Multiple rewards programs are available with business credit cards, and many companies look forward to these rewards.
We looked at the main rewards from specific cards businesses use and consider important. We also looked at the statistical star ratings of these cards just here.
💰 Cashback
Many businesses value cashback reward programs that reward employees for spending with selected retailers. They value the chance to earn discounts on their purchases so they can reinvest the cash into the business.
Some of the most popular cashback business credit cards with UK companies include the Capital On Tap and the Barclays Select Cashback Business Credit card, which received 4.7 and four out of five stars from consumers, respectively.
💰 Avios
Avios rewards programs are popular rewards businesses look forward to with their business credit cards. They consider travel cost savings an ideal factor, especially for companies that complete international business work.
One of the most frequently used credit cards that offer these rewards includes the American Express Accelerating Business Card, which offers bonus rewards for signing up and spending £5,000 in the first three months.
One statistic about this card is that it received four stars out of five in terms of its features and benefits. Capital On Tap is another popular option that received 4.7 points out of five from businesses in terms of the card's popularity.
💰 Business expenses discounts
We found that cards that offer business expense discounts are also popular with UK businesses. An example of a business credit card that offers business expense discounts is Capital On Tap, which offers discounts at Superscript, Slack, and Dropbox.
What is the future of business credit card usage?
Looking ahead, it's clear that there may be a transition for business credit card use.
Fintech and data analytics are key developments that many businesses may look forward to alongside their use of business credit cards. It matches the fact that many companies want greater insights into how their employees spend and use the credit card.
Many financial experts suggest that having a business credit card is useful for companies. Whether it's for earning rewards such as Avios points or making savings, plenty of advantages make these cards an ideal option.
It's expected that many credit card companies will need to offer tailored solutions in the future that align with each company's requirements. They will likely be able to offer these solutions using advanced artificial intelligence to ensure businesses can oversee and predict transaction histories more accurately.
With solutions such as these, we can expect companies to have a much more strategic method to spend their funds and handle their cash flow management more efficiently.
Additional tailored solutions, such as contactless mobile payment options combined with business credit card accounts, will likely get more sophisticated, offering convenience to many businesses and their employees.
Business credit card statistics: Key points
Business credit card usage fluctuation can clearly vary depending on many factors. With credit scores, the pandemic and alternative funding methods available, the usage of these cards doesn't stay the same. Yet, these cards are still a very popular method of accessing funding for SMEs and other UK companies.
Even though other forms of funding, such as personal loans, many companies own one business credit card and prefer the convenience, credit, security benefits and control these cards bring them.
No matter whether you're looking forward to rewards programs or cashback, cash flow management advantages or employee spending monitoring, predictions on business finances with card features or just ways to save money for your business, a credit card for businesses can help. With their useful features, credit cards for businesses are not going away for now.
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