Small businesses represent 99% of U.S. businesses, employ 46% of Americans, and contribute 44% of GDP, according to the Federal Reserve’s Small Business Credit Survey. The survey shows credit cards are a key financial tool for managing operating costs, cash flow fluctuations, inventory, and unexpected expenses.
Recent data shows 56% of employer firms seek financing for operating expenses, and 51% identify inconsistent cash flow as a major challenge. Many early-stage and small firms rely on credit cards when traditional financing is limited.
The article argues that capping credit card interest rates at 10% could limit small businesses’ access to credit. Rate caps may prompt lenders to reduce credit availability, raise fees, or tighten lending standards, potentially driving businesses to costlier or less transparent financing alternatives.
The piece concludes that policymakers should recognize the broader economic role of credit cards in supporting small-business stability, growth, and consumer spending.
Source: Texas Border Business
Original Story: https://texasborderbusiness.com/why-credit-cards-are-essential-to-americas-small-business-economy/