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Should I Finance My Business Startup with Credit Cards?


Question: Should I Finance My Business Startup with Credit Cards?
We have all been burned with credit cards, but sometimes it's the only way to get cash for your business. Instead of using your personal credit cards to pay for business purchases, get a business credit card instead. Here are some tips for using business credit cards:
  1. Use Only in Emergencies. Get the card and put it aside. List the circumstances under which you will use the card (immediate cash flow crisis, for example, or emergency repaid), then don't use it for anything else.
  2. Find the best deal. Unless you travel frequently or make a lot of purchases that can get rewards, go with the card that gives you no interest for the longest time. Most of the time, you get more savings with no interest rates than you do with spending rewards. Also look for cards with no annual fee, to keep your costs down. If you have less-than-stellar credit, you may have to pay more in interest rates and fees.
  3. Watch due dates and minimums Incurring late charges adds to your spending, so watch what you are doing.
  4. Pay off More than the Minimum. Paying off only the minimum each month puts you deeper in the hole. Try to pay off as much as you can every month, to keep your interest charges low.
While it is tempting to use a credit card for many business expenses, keep an eye on your expenditures so your card balance doesn't get out of hand and to save on costs. Even though credit card expenses are deductible to your business, they cut into your profit and ultimately cost you money, so use wisely.

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