A survey by loan comparison site Small Business Loans Australia found while 23 per cent of small and medium-sized businesses planned to reduce the number of credit cards, 39 per cent flagged increasing their use.
A quarter of businesses planned to increase the number of credit cards they owned and 14 per cent signalled they would apply to increase the limit on at least one of their cards.
Small Business Loans Australia CEO Alon Rajic said the strategy of using credit cards to relieve immediate financial pressures or as a buffer could be costly.
"Unfortunately, relying on credit cards, which carry a much higher interest rate than other forms of finance, such as loans, will end up costing businesses more in the long term," he said.
Credit card interest rates average 20 per cent.
But the survey showed two-thirds of SMEs were looking at alternatives such as direct bank payments or EFTPOS to keep track of their spending.
"Although credit cards may help businesses keep their head above water during challenging times, it is important for SMEs to consider the wider range of benefits payment methods such as EFTPOS and direct transfer have to offer, when they have the cashflow to cover it," Mr Rajic said.
"These include lower to zero transaction fees, immediate settlement, simplified expense tracking, privacy and security, and no credit risk."
The survey identified small businesses in WA, Victoria and NSW as being more likely to examine direct payment methods such as bank transfer and EFTPOS over the next six months.
Business conditions are slowing across the country, with the most recent NAB business survey result down one point in July.
Westpac economists say a sustained reprieve in business confidence is unlikely in coming months, with the gloomy trend appearing to be broad-based by industry and state.
On the positive side, Westpac economists believe the Reserve Bank has finished its interest rate tightening cycle.
"While there are still clear risks, particularly around the tight labour market, these are unlikely to form a strong enough case for the RBA to tighten further in coming months, particularly with inflation continuing to ease and growth outcomes confirming a sharp economic slowdown," the economists said in a note on Monday.
Wage data and the latest jobs figures to be released this week will shed further light on the state of the Australian economy.
JP Morgan economists expect the wage price index rise to come in at 0.9 per cent quarter-on-quarter, leaving the annual rate at 3.7 per cent - the strongest pace of growth in the past decade.
The jobless rate is expected to tick up 0.1 per cent to 3.6 per cent, with 5000 jobs added and a stable participation rate.
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