Small Businesses Racking Up Credit Card Debt to Combat Inflation Pressures


Small business credit card debt is on the rise. And it’s likely due – at least in part – to inflation. According to data from Bank of America Institute, small business credit card balances are up 18 percent since 2019.

Small businesses reach for credit cards for many reasons. But in 2024, the main factor putting financial pressure on businesses seems to be inflation. In fact, a recent survey by Goldman Sachs found that 71 percent of small business owners feel that inflationary pressures have increased on their businesses over the past three months.

Turning to credit cards is just one of the adjustments that small businesses are making. In addition, 47 percent said they are raising prices, 45 percent are working more hours, and 32 percent are reducing their own salary, according to Bank of America’s survey.

The links between inflation and rising credit card usage are clear; if it costs more for businesses to buy the products and services they need to operate, more are likely to go into debt to cover those expenses. For those who need just a short-term boost, credit cards can be a satisfactory solution. But they generally come with high-interest rates. So, businesses that can cut unnecessary costs or adjust in other ways may be more successful in the long term.

In addition, while inflation may be partially to blame for the overall increase in credit card balances, it also explains why the current rate increase is not as perilous as it might seem.

In fact, when you consider the 22 percent inflation increase since 2019, the 18 percent increase in credit card balances seems much more in line with what would be expected. The data also suggests that businesses are cutting unnecessary expenses. So even with some increased debt, small business owners are largely being smart about their finances, even during a difficult stretch.

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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends and has been a member of the team for 12 years. Annie covers feature stories, community news and in-depth, expert-based guides. She has a bachelor’s degree from Columbia College Chicago in Journalism and Marketing Communications.