Why Small Business Owners Still Reach for Personal Cards

Small to medium-sized businesses (SMBs) are telling credit card issuers something they need to hear: Rewards don’t seem to be working. Or at least, they’re not very effective at enticing more SMB owners and operators to move their operational spending to business cards.

It’s a surprising message. Many business cards offer what Dave Grossman, the founder of Your Best Credit Cards, said are “incredibly rich rewards.”

Despite that upside, new research by PYMNTS Intelligence in collaboration with Mastercard reveals that only 28% of SMBs would pay a fee for a business credit card with rewards. What’s more, 39% of SMBs don’t even use a business card. Three in 10 use personal credit cards for business expenses. Adoption is especially low for “micro” SMBs with annual revenue below $150,000, with only about one-third using business cards. But even among SMBs earning over $1 million a year, 16% say “no” to business cards and 27% use personal cards for company needs. With small businesses alone numbering 36 million in the United States and driving 43.5% of U.S. GDP, it all adds up to a lot of missed opportunity for card issuers.

Unlike bank loans or credit lines that are often secured by equipment, real estate or inventory that lenders can seize upon default, business cards, which are unsecured credit, aren’t hard to get. Chase says a small business could have $0 in revenue and still qualify. So could self-employed owners of hair salons and plumbing shops, freelance graphic designers, independent contractors driving for FedEx and gig workers.

The Rewards Are Already Rich

The small business card landscape already offers solid rewards. That makes it even harder for issuers to up the ante by putting more on the table. “The signup bonuses on small business credit cards can be so large that consumers often get lured in wondering how they might be eligible for a such a large bonus,” Grossman told PYMNTS.

Tony DeSanctis, who leads the Payments Practice at Cornerstone Advisors, said that business cards generally have “simpler but more robust rewards, primarily cash back.” For example, Capital One’s Spark Cash Plus provides unlimited 2% cash back on purchases. Chase Ink Business Unlimited similarly offers unlimited 1.5% cash back, plus some higher earning categories. Bank of America’s Business Advantage cash back program allows users to choose a category for extra cash back. DeSanctis said those benefits were possible due to the higher interchange fees business cards carry.

In other cases, small business cards closely mirror what personal cards offer. The American Express Gold Card for consumers advertises “4X Membership Rewards” points on restaurants (worldwide) and U.S. supermarkets, along with some other juicy multipliers. Similarly, the American Express Business Gold Card offers the same multiplier on “business-y” spending categories like software, electronics and transit, though the elevated earn rates apply only up to $150,000 of qualifying purchases a year before dropping to 1 point per dollar spent.

The Personal Card Benchmark

The problem, then, may be not that small business cards fall short on rewards. It’s more that personal cards have caught up. Corporate cards once set “the gold standard for rewards,” with airport lounge access, travel insurance and premium programs that consumer cards simply could not match, said Campbell Shaw, the vice president of commercial, financial services at Valuedynamx, a rewards platform for businesses.

“That’s changed,” he said, adding that over the past decade, those had become increasingly common on consumer card products, “closing the gap and raising expectations on both sides.”

What’s more, SMB owners may simply view the personal cards already in their pockets as the default. If they get great rewards and have sufficient credit limits, is it worth paying another annual fee and keeping track of another card just to “cleanly” separate personal and business spend? When their operations are small and money is tight, the answer may well be “no” unless the business card brings something new to the table. Nearly 1 in 2, or 46%, of SMBS, would be willing to pay a fee for a business card that lets the holder adjust their payment windows based on the business has sufficient income, the PYMNTS report shows.

New Laws Could Squeeze Rewards

Issuers also face another challenge: proposed legislation that could cut into their revenues.

In January, lawmakers in the House and Senate reintroduced legislation that could reduce card rewards by forcing large issuers with more than $100 billion in assets to allow most cards to run on at least one network other than the one printed on the plastic. So purchases on, say, a Visa-branded card could be processed through the Discover network, but not through Mastercard. That’s because the proposed legislation says the alternative network must be smaller. Merchants could choose which network to use when processing a given transaction instead of being locked into just one.

Because different networks charge different “swipe” fees to merchants when  processing a transaction, supporters of The Credit Card Competition Act of 2026 argue that the legislation would reduce swipe‑fee costs and potentially retail prices.

Back to rewards. They exist because card issuers and networks use part of the swipe fees, also called interchange fees, they charge to merchants to fund sign‑up bonuses, cash back, partnerships with hotels and airlines and other perks. It’s a big business. Last year, American Express paid Delta Air lines $8.2 billion for miles that cardholders earn and redeem on Amex-Delta co-branded Delta SkyMiles credit cards.

If swipe fee revenue is squeezed, issuers could cut back their cash back programs and sign‑up bonuses, raise annual fees or devalue points earned by cardholders to protect their profitability.

Caught in the Middle

SMB-focused credit cards are caught in an awkward middle ground because the day-to-day reality for many smaller businesses looks less like “enterprise spend management” and more like “household finance with receipts.” That helps explain why features that large enterprises love, such as robust spend controls, multilayer approvals, virtual cards, policy enforcement, have little relevance for a business with a handful of employees, let alone sole proprietorships. Still, 43% of SMBs would pay for a business card with strong fraud and cybersecurity protection, the PYMNTS report shows.

Meanwhile, the biggest levers of value in the enterprise segment are often invisible to SMBs. Large companies can negotiate card economics such as rebates tied to volume and payment terms that do not show up in a publicly advertised rewards earn rate. SMBs lack the scale, the predictable spend profile and the procurement leverage to secure those negotiated rebates.

While many issuers market small business cards with enterprise-like features, many SMBs may view rewards with a consumer-like mindset. If the industry wants adoption to move, it has to resolve that mismatch either by making rewards more attractive for the SMB reality or by packaging controls and spend management in ways that feel as effortless and immediately valuable as a great consumer card. Or better yet, both.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.