Money is always a top consideration for every kind of business. Whether you’re just opening your business or looking to expand it, it is important to have a liquid capital or a line of credit. Many entrepreneurs use a business loan, but that’s not always sufficient for working budget. Lots of such businessmen, especially which bootstrapping their companies, a dedicated business credit card is one option.
Undoubtedly, credit cards must be controlled and managed wisely. If you can you’re your credit debt, a business card could be a great alternative to taking out a loan.
Business card variants
Credit card issuers such as Visa, MasterCard, American Express etc. offer their customers cards tailored to owners of small businesses. Many of these cards come with special benefits that can accumulate as users make payments. Some of the most common benefits are airline miles, extra cards for employees, rewards points, savings on business supplies and so on.
Some financial analytics recommend using credit cards to finance a startup. But if you get a business card, it should remain completely separate from your personal credit cards. Mixing personal and business credit purchases makes it difficult to sort through and manage your business expenses and payments. Keeping such cards separate will also allow you to take advantage of monthly, quarterly or annual statements provided by your credit card issuer. These statements can be very helpful when you’re controlling expenses.
Credit card companies also offer low interest rates on new cards. No-interest credit cards give you opportunity for a limited time to finance your business without paying a percent of interest. Nevertheless, missing a payment due date or not paying it at all before the deal ends could result in huge fees – on the whole balance, not just the remainder of what you owe.
The back side of using credit cards in your business
While business credit cards can be an attractive way to make company working. So using them as a regular practice is not recommended. But one can always use them to buy a big-ticket when money is temporarily tight. And don`t forget – their misuse can bring a business down.
Forbes business counselors who work with major banks in Leeds City recommend against credit card usage by clients to finance their venture, as it is a first step for business failure.
One way to prevent overspending of your business’s credit card budget is to use strictly one card. Using multiple cards to make all the payments can lead to financial risks.
Be careful with your money and business!