A recent report by the consulting firm McKinsey & Co. found that a typical small business has $11.5 million in annual revenue and the average spend on a small business card is $2,000.
The cost of a business card can range from as low as $3 to as high as $27,000 per year, McKinsey said.
The research, however, is a “first look at the costs of small business cards and does not give any specific estimates of cost,” the firm said.
In an email, a McKinsey spokesperson said the firm does not provide cost estimates for the business card industry.
“This is an industry wide survey, so it’s impossible to know how much of the cost of business cards is borne by consumers,” the spokesperson said.
A recent McKinsey study also found that the average cost of the Business Card Marketing Program, a fee that is typically paid by card issuers to the cardholder, is $12.
In a recent research report, McKinseys said the average small business spend on the Business Cards and Business Card Programs was $4,000, a figure that could vary depending on the card type and cardholder.
“Our survey did not include the costs associated with the marketing programs, so we do not know what those costs would be for small businesses,” the McKinsey report said.
“We also did not consider costs associated to cardholder fees and cardholders fees.”
The report did find that the cost per business card would be lower for consumers.
In its report, the consulting company found that average cardholder spend on cards ranged from $2.75 to $3.75, depending on card type, including some cards with no marketing fees at all.
The average card was not associated with any marketing fees, the company said.
Some business cards, such as the Visa Signature and the American Express Platinum, do not have any fees associated with them.
For those that do, the fees are typically only a small part of the total cost.
According to the McKinseys report, some small businesses also may need to pay additional fees to get the best business card.
For example, the Visa and Mastercard Business Card programs may not have the most advanced features and might not be the most popular cards, the report said, so the fees may not be justified for many small businesses.
The study found that, for many card issuer’s, the most common reasons for a cardholder fee is “the costs of the marketing program, the card issuer’s fee and the card’s issuer’s minimum balance.”
The study also said that the fees associated to these cards were “much less than the cost associated to a traditional card.”
The McKinsey research did not examine the fees charged to merchants for the Business cards.
“As the Business card market evolves, we will continue to explore ways to better understand the cardholders’ cost profile, particularly in light of recent developments,” the consulting group said.
Business card types include Visa Signature, American Express and MasterCard.
A study from the consulting firms McKinsey and Drexel found that customers were less likely to spend money on cards when the card is used for business transactions than when it is used to purchase products.
However, in most cases, a business credit card was the preferred way to spend cash, the study found.