Increased satisfaction with small business credit cards
Small business credit card users felt much better with their cards in 2021, according to the JD Power 2021 US Small Business Credit Card Satisfaction Survey. The organization says overall satisfaction for small business credit card customers is on average 852 (on a 1,000 point scale). This is 12 points more than in 2020 and three points better than in 2019.
American Express, Capital One and Discover tied for first place with 864 points. Capital One has taken a big leap from fourth place (842) last year to fifth (847) two years ago.
American Express and Discover have historically dominated JD Power’s consumer credit card satisfaction ratings, placing first and second in all 15 editions (Amex has 11 wins and Discover has five, including a tie in 2014).
JD Power has only released small business credit card ratings for the past three years. Discover won in 2019 with 878 points and American Express finished second with 862. Last year Discover defended its title, but with a smaller margin (867 to 861, with Amex again in second).
For the most part, small business credit card holders are more satisfied with their cards than consumer credit card holders. Industry-wide, the average satisfaction scores are 852 for small business cardholders and 809 for consumer cardholders.
“The most powerful driver of small business customer satisfaction with credit cards is a strong alignment between specific business needs and the benefits of the individual card,” said John Cabell, director of wealth intelligence and loans at JD Power, in a press release.
âWe saw the dark side of this phenomenon at the height of the pandemic, when many customers were more frustrated with fees and credit limits and could not take advantage of the card’s benefits. Now, as the outlook begins to improve for many small businesses, airline cards, along with retail and bank-brand cards, are starting to play a major role in the rewards satisfaction equation. customers, âhe added.
What caused the increase
JD Power notes that small business credit card satisfaction increased in almost all categories in 2021, with airline awards seeing the biggest increase. This is a bit surprising because, while travel has intensified throughout the year, numerous reports indicate that business travel is rebounding much more slowly than leisure travel. However, it is better to travel reduced than no trip. And complaints about canceled trips likely lowered satisfaction in 2020, leading to a sharper increase in 2021.
Another bright spot in 2021, according to JD Power, was personalization. âWhen card issuers proactively deliver the technology and resources that small businesses need, such as personalized reports, account management support, and advice on rewards and benefits, customers see more value. of their cards by paying off their balance each month, using the rewards and using the benefits available to them, âthe firm wrote.
This is a testament to the versatility that many card issuers have emphasized throughout the pandemic, such as Chase’s Pay Yourself Back. The program has allowed cardholders to redeem their Ultimate Rewards points for daily spending at higher valuations previously only available for travel. Business-friendly examples include social media and search engine advertising purchases, as well as shipping, internet, cable, and phone services.
The American Express Business Platinum CardÂ® also added several credit opportunities on business-friendly statements – offsetting some recruiting, mobile, and IT fees – and a higher payout rate on some business expenses ( although it also increased the annual card fee).
What didn’t go so well
The involvement of card issuers in the paycheck protection program was “a double-edged sword,” reports JD Power. On average, a small business that applied for a PPP loan from the same financial institution that issued it a small business credit card gave a credit card satisfaction score of 871 if it received the PPP loan, but of 774 only if it was refused.
The bottom line
In 2020, many small business owners lamented that credit card fees, interest, and customer service inconvenience were preventing them from overcoming COVID-19 issues, such as declining sales and canceled trips. But in 2021, the situation improved dramatically as credit card rewards programs proved more useful and issuers unveiled new benefits better suited to their needs.
A question about credit cards? Email me at [email protected] and I would be happy to help.