Capturing Business Expenses With Personal Credit Cards Is Alluring, But Card Industry Must Find Creative Ways to Do So, Says Auriemma Consulting Group

NEW YORK, NY, May 21, 2012: Credit card companies are always interested in ways of increasing card usage. One potential way to do that is by encouraging the use of personal cards to make business-related purchases. Encouraging consumers to make business purchases with their cards is a win-win for banks; not only are spending volumes higher, but the risk in such purchases going unpaid is relatively low since cardholders are typically reimbursed by their employers for such expenses.

Opportunity Remains Largely Untapped

Yet the opportunity remains largely untapped. According to the latest research from Cardbeat®, a syndicated research report published by Auriemma Consulting Group, Inc. (ACG), just over one-in-five (21%) credit cardholders make business-related purchases as part of their job responsibilities, up slightly from the 17% who answered the same way in October 2008. But the incidence is a fraction of the total potential. What's more, cardholders today are placing less of their business-related expenses on personal credit cards than they were in 2008, with an incidence of 45%, down from 62% in October 2008.

Key Is Targeting Specific Business Expense Categories

While some spending categories like office supplies remain a frequently-mentioned expense category (cited by 87% of respondents), just 45% of those who make such purchases use a personal credit card to pay for such purchases, down from more than half (51%) in October 2008. But other expense categories such as meals and hotel stays are frequently incurred expenses, and a majority (60%) of respondents also claim to put those expenses on their personal credit cards. This suggests that the main challenge is trying to discern business expenses from personal expenses.

Dr. Patricia Sahm, Managing Director at ACG says that creative thinking, such as developing partnerships with companies in frequently-incurred expense categories like hotel chains might offer an attractive way of channeling those expenses to a particular issuer’s credit card. She cites being able to offer cardholders the ability to receive free or discounted internet service at a hotel chain when cardholders pay with a particular credit card as an example of creative thinking about the issue. Dr. Sahm adds that issuers able to tap into these business expenses also stand to capture a lucrative slice of spending which is largely untapped today.    

About Auriemma Consulting Group

Auriemma Consulting Group (ACG) is a full-service management consulting firm serving the payments, lending, and retail industries since 1984. Cardbeat® is ACG’s syndicated market research study of credit cardholders, conducted monthly in the U.S. and quarterly in the U.K. ACG also conducts research in the debit and prepaid space, and publishes a quarterly report known as The Payments Report. With offices in New York and London, ACG consultants are experienced practitioners drawn from the credit card, private label, auto finance, mortgage, and retail banking industries that we serve.

For more information, please contact Dr. Patricia A. Sahm at 212-323-7000 or