Small business credit card satisfaction surges

Satisfaction with small business credit cards is rising, particularly among financially vulnerable businesses, according to the latest J.D. Power U.S. Small Business Credit Card Satisfaction Study. The overall satisfaction score rose to 716 (on a 1,000-point scale), from 708 last year. Areas of satisfaction that showed the greatest improvement included terms, benefits and rewards programs, J.D. Power said.

Satisfaction is highest among small businesses that are financially vulnerable. These businesses show especially higher satisfaction when cards include features that help them financially, like rewards programs, purchase payment plans, balance transfers and discounts, J.D. Power found.

The company uses a combination of factors to rate the financial health of a small business, including creditworthiness, access to affordable funding and safety net items like insurance coverage.

Small businesses avoid surcharges

The study, which queried over 3,700 businesses with annual revenues between $10,000 and $10 million, also uncovered a trend worthy of note by ISOs and their sales reps: small businesses don't like surcharges.

In fact, more than a fourth (28 percent) of small businesses surveyed said they don't use their credit cards to pay for purchases when a merchant adds a surcharge. Instead, they opt to pay with cash (44 percent), some (24 percent) even take advantage of buy now, pay later (BNPL) rather than use their credit cards.

Credit card favorability ratings also fall significantly (by 40 percent or more) among businesses that choose not to use credit cards when facing surcharges, J.D. Power said.

89 percent of small businesses use credit cards

"Merchants report few macroeconomic differences in the past year and 49 percent of small businesses are still categorized as financially unhealthy," said John Cabell, managing director of payments intelligence at J.D. Power.

"It is noteworthy," he added, "that this group really is driving a significant increase in customer satisfaction with business credit cards. Credit cards are used by 89 percent of small businesses for business purchases, making them the most frequently used form of payment by a wide margin."

Other payment methods used by small businesses for recent purchases, in order of preference are:

• Digital wallets (used by 47 percent)
• Cash (38 percent)
• Debit cards (37 percent)

BNPL is gaining traction, with 17 percent of those surveyed saying they had used this payment method for recent purchases. That's an increase of 4 percentage points over last year, J.D. Power noted.

AmEx and Chase lead the pack

American Express ranked highest in customer satisfaction for the fifth consecutive year, with a score of 750. Chase came in second with a score of 718. Discover, which was recently acquired by Capital One Financial Corp., garnered a score of 722. However, J.D. Power did not include Discover in its overall rankings because it did not meet study award criteria.

Credit cards issued by six other banks garnered top rankings from small businesses surveyed by J.D. Power. They were:

• Citibank (with a score of 714)
• Wells Fargo (713)
• Bank of America (707)
• Capital One (699)
• PNC (696)
• U.S. Bank (666)

Overall, the findings underscore how central credit cards remain to small business operations and how sensitive satisfaction is to features that deliver real, everyday value. As financially vulnerable businesses continue to lean on credit cards for liquidity and flexibility, issuers that emphasize transparent terms, meaningful rewards and tools that ease cash-flow strain are likely to strengthen loyalty. At the same time, small firms' aversion to surcharges and growing willingness to explore alternatives such as digital wallets and BNPL highlight shifting preferences that ISOs and issuers alike can’t ignore.

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