TROY, Mich.— Small businesses owners are not just feeling more optimistic about the future and spending more money, they are even feeling more satisfied with their credit card providers, a new survey has found---with rewards programs playing a critical role.
According to the new J.D. Power 2023 U.S. Small Business Credit Card Satisfaction Study, that “growing sense of confidence among small businesses is helping to drive overall satisfaction with business credit card issuers,” which is higher than its peak level in 2019.
“Card issuers have done a great job of delivering to small business owners services and rewards programs that have helped them through a tough economic period, and now, as the business outlook improves, issuers are being rewarded with higher and higher levels of customer satisfaction," John Cabell, managing director of payments intelligence at J.D. Power, said in a statement. "However, with interest rates still elevated, two areas of the customer experience that are still lagging are reasonableness of fees and competitiveness of rates. These will need to be managed carefully by issuers during the next year as more small businesses seek low interest payment plans.”
Key Findings
According to J.D. Power, key findings from the 2023 study include:
- Satisfaction rises as small business outlook improves. “Overall satisfaction among small business credit card customers is 858 (on a 1,000-point scale), which is up a significant 7 points from 2022 and up 9 points from 2019. Overall, 38% of small businesses say they are financially better off than they were a year ago, up from 34% in 2022. Also, 41% of small businesses are carrying revolving debt, down from 44% in 2022.”
- Business card expenditures increase. With small businesses now spending an average of $13,000 per month on their credit cards, 78% are using their business cards for office supplies, 70% are using them for operating expenses, 65% are using them for travel, 55% are using them for inventory, 49% are using them for meals and 37% are using them for raw materials.”
- Despite satisfaction gains, credit card terms could be an issue. “Business credit card issuers see improvements in customer satisfaction across nearly every factor evaluated in this year’s study, with the exception of credit card terms, which remained flat year over year. Biggest customer concerns with credit card terms are with reasonableness of fees and competitiveness of interest rates, especially among businesses with smaller annual revenues.”
- Rewards programs are critical to small business customer satisfaction. “Small business customers who spend $20,000 or more per month have higher levels of overall satisfaction with their card issuers, driven largely by increased interaction and improved alignment of spending with reward programs. Highest spenders are also likely to use five or more supplementary card benefits, which further increase overall customer engagement and satisfaction.”
Study Rankings
J.D. Power said that in the study American Express ranked highest in customer satisfaction for a third consecutive year, with a score of 873. Capital One (866) ranks second and PNC (858) ranks third.
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