Credit Cards, Small Businesses, & the U.S. Economy

Tuesday, 13 July 2010

Keybridge study shows positive benefits of credit cards for small businesses and U.S. job creation.

In July 2010, Keybridge Research released the results of its study on the effects of credit cards on small business growth and U.S. job creation.  Commissioned by the American Bankers Association (ABA), “Quantifying the Impact of Credit Cards on Small Business Growth and U.S. Job Creation” is the first comprehensive study on the effect of business credit cards on small businesses’ ability to hire new employees and grow their revenues.

The study finds a statistically significant positive relationship between access to credit card credit and small business employment and revenue.  Using a nationally representative sample of small businesses, the analysis showed that for each one percent increase in business credit card credit available to small businesses, there is a 0.051% increase in firm employment and a 0.14% increase in firm revenue.  Based on these findings, it is estimated that the expansion of credit card lending to small businesses from 2003 to 2008 contributed to the creation of 1.6 million U.S. jobs, including a direct contribution to the creation of 592,000 small business jobs, and an additional 1.0 million jobs throughout the U.S. economy.  It is also estimated that the increase in credit card lending to small businesses from 2003 to 2008 resulted in a cumulative increase in the value added of the U.S. economy of $142 billion – on an annual basis this is equal to about one quarter percentage point of total U.S. GDP. 



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