Industry Trends

What Credit Card Usage Says About the Health of Your Small Business

Nov 17, 2022 • 5 min read
health small business credit
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      Is your business feeling healthy? 

      That’s what Dun and Bradstreet strives to answer each month with its Small Business Health Index (SBHI).

      This month, the answer is yes, although with a caveat that the index is just the tiniest bit lower than it was the month before.

      The findings are summarized in Dun and Bradstreet’s November 2022 report on business-related economic trends, which looks at the latest patterns in economic activity and spending by US small businesses. In the most recent report, which actually uses stats from September 2022, the SBHI is down just a slight 0.3 points to 99.2. Considering the SBHI tops out at 100, that’s a positive health score for US small businesses. Notable indicators include a drop in credit card delinquency (down 11.2%) and a 5% increase in usage of credit cards by small businesses, both of which are tempered by payment delinquencies increasing slightly (0.5%) from the previous report.

      What Does the SBHI Say About Small Businesses?

      According to Dun & Bradstreet, the slight dip in the SBHI—and, in particular, the increases in both credit card use and payment delinquency—may be a response to challenges in the current economic climate, particularly for smaller and independent businesses. Small businesses, they write, may be experiencing “credit constraints” linked to “rising interest rates and the resulting upward pressure on severe delinquency risk.”

      The rise in business credit card usage may also indicate that businesses are ramping up for the holiday boom by making new purchases with credit cards while holding back cash in hand, especially if they have strong credit and using the card feels pretty low-risk. In this case, the business keeps its cash flow consistent, and credit cards act as a buffer. 

      For example, a seasonal businesses that can bank on an incoming boom in sales or during the holidays, whether a turkey farmer, a toy store, or a car-rental service, might keep cash flow consistent by using a business credit card if it’s perceived as a surer move with expectations of increased revenue around the corner. 

      Should You Be Using a Business Credit Card Now?

      If you’re considering applying for a business credit card, you’re in good company. Five years ago, Mastercard had reported that 46% of small businesses were using personal credit cards for business expenses (source: A few years later, the Visa/A.T. Kearney Small Business Credit Card Study noted that nearly 70% of small businesses used a credit card for some expenses each month and 71% of that group designated a card specifically as “business.” 

      Business credit cards provide a number of benefits beyond convenient access to funds and the power to help keep cash flow more predictable and consistent. They can also help smaller businesses track expenditures, and if increasing interest rates are a concern, with a business credit card, you only pay interest on the funds in use.

      Credit cards are also seen as a good way to build or repair a business credit history, especially for new businesses that might have more difficulty securing other sources of funding. Plus you could tap into a card with perks like cash back or travel funds. Figure out on your own what to do with those.

      What Is Dun and Bradstreet’s SBHI? 

      Curious about Dun and Bradstreet’s SBHI? Its intent is to measure “business health at the Metropolitan Statistical Area and [the] Industry level as it relates to payment patterns, failure rates, and credit use.” The November report, which we’ve reported on here, focuses on September 2022 data; October’s SHBI, which was slightly higher at 99.5, reported on data from August 2022.

      According to D&B, the SBHI is measured using 4 main factors for small businesses:

      • Average credit card utilization
      • The percentage of credit cards that are 61+ days past due
      • Ratio derived from the number of failures in the last 12 months over prior 12 months
      • The percentage of delinquent dollars 91+ days past due out of all outstanding balances

      Whether the SBHI is something you should keep track of for your business is really up to you. It’s interesting to see the assessed health of a diverse market on a month by month basis, but what’s happening in your own business, industry, or region may vary widely from an index that’s speaking for 32 million+ business owners.

      The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.
      About the author
      Rachel Mennies

      Rachel Mennies is the owner of The Little Book, LLC, a small business that provides writing and editing services to individuals, nonprofits, and businesses of all sizes. At last count, Rachel's writing and editing skills have helped shape nearly 500 articles and blog posts for

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