Almost half of small business owners don’t have a business credit card

New research by Capital on Tap has found that 46% of business owners don’t have a business credit card, with 54% of consumers actively avoiding them

For business owners, cash flow management is the main purpose of a credit card, with 80% highlighting this as their reason for use.

Employee-related expenses such as payroll and employee perks rank as the biggest expenditure for small businesses, with an average of £1,902.90 spent each month on these costs. This is followed by raw materials (£1,707.50) and professional services (£1,429.40). Interestingly, businesses that have operated for over a decade invest more in professional services, spending an average of £2,076.70 per month in this area. 

The survey also explores how different industries engage in credit cards, with the building and construction industry topping the list: nearly two-thirds (65%) of owners in this sector state they use a credit card. At another end of the scale, just 23% of personal care business owners currently use business credit cards. 

The survey also explored how the general population uses credit cards and their spending habits. Brits rely on their credit cards the most for holidays and travel, spending nearly £4,670.40 a year on this.  The second biggest spending area is rent and utilities (£318.20), followed by insurance (£244.70).  

The survey also highlighted how age plays an important role in attitudes toward credit cards and debt. Of all respondents, 53% have maxed out their credit card at some point, a figure that increases to 78% among 18-24 year olds. 

However, the older generation appear to be more cautious, with just 31% of 65 or over maxing out their card and only 6% missing a credit card payment. 

Despite the survey highlighting the advantages of credit cards with 63% of business owners stating that perks and rewards are their main attraction towards credit,there is still a shared sense of uncertainty among both business owners and consumers. Specifically, 34% of business owners and 31% of consumers report that high interest rates and fees are a concern.

For consumers, worrying about overspending is the biggest barrier to owning a credit card, with 36% stating this as their main concern. This is followed by concerns about debt (33%).  

While nearly a third of consumers (31%) prefer to pay upfront using methods like cash, bank transfers, or savings, this is less of a concern for business owners, as only 21% cite it as a reason for hesitating to use credit cards. 

Alex Miles, Chief Operating Officer at Capital on Tap, explains that the idea that credit cards mean taking on debt is one of the biggest credit myths: “The key is to spend within your means. If you’re new to using credit, consider setting a lower credit limit to help manage spending. It’s also wise to integrate your card into your monthly budget and set up a direct debit to automatically repay your balance on time. That way, you stay in control without the stress.” 

Category of spending	Average monthly spend on credit card
Employee-related expenses (e.g., payroll, perks)	£1,903
Raw materials	£1,708
Professional services (legal, accounting, consulting)	£1,429
Marketing/advertising costs	£1,368
Equipment or machinery	£1,361
Inventory purchases	£1,309
Shipping and packaging supplies	£1,306
Client and staff entertainment	£1,282
Travel and accommodation	£1,263
Payment processing fees	£1,246

 

Barriers to credit card use	% of business owners who say this is a barrier	% of consumers who say this is a barrier
High interest rates or fees	34%	31%
Worried about overspending	27%	36%
Concern about accruing or accumulating debt	27%	33%
Prefer paying upfront using cash, bank transfers, or savings	21%	31%