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Don’t get it twisted – a piece of plastic for your business can be crucial. Should there be a lack of liquidity and there are debts to be paid, the balance on the card will come in handy. In fact, credit card companies have saved countless businesses, startups and conglomerates, over the years.
The sad truth is that they have also destroyed a couple along the way thanks to common clangers. Everyone knows how dangerous they can be yet companies continue to fall into the traps. And, the consequences are pretty huge. Thankfully, the following tips can help you avoid the pitfalls and stay solvent. Here’s what you need to know.
Choosing One
Because the introduction explained that they are important, this is going to sound hypocritical but you may not need one. Before you start to ask questions, let’s get one thing straight – alternative finance is a savvy move. However, it doesn’t have to and shouldn’t take the form of a credit card if the cons outweigh the pros. Let’s say the company needs money but it requires cold, hard cash. In this case, businesslineof.credit will be a better option as it offers money upfront. Also, consider the promotions before accepting them at face value. 0% interest on purchases is cool but balance transfers are best.
Picking The Wrong One
Okay, you’ve decided that a credit card is the right option and need one in your life. The next issue is choosing correctly and not picking a company which doesn’t suit your need. As silly as it sounds, a large proportion of businesses do this because they are obsessed with the hard sell. They see an advertisement which looks perfect and don’t do their due diligence. For instance, fundera.com outlines the importance of building business credit. Sometimes, though, a personal card can work out better depending on the circumstances, such as the type of business and rate of interest.
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Splashing The Metaphorical Cash
As soon as a brand new piece of plastic arrives, it’s tempting to start shooting. After all, the limit is quite huge and the spending happens remotely. There’s no need to count the money because, well, you can’t see it leave the account. As a result, businesses aren’t as frugal as they should be and make purchases that they shouldn’t. It’s not difficult to validate anything with the right stubborn attitude. Savvy spenders often develop a plan – check out forbes.com – to help them keep their spending habits in check. Then, the debt won’t mount.
Racking Up Air Miles
“It’s okay. I’ll get it on my credit card because I can build up my air miles.” This is fine so long as the purchase is worth the rewards. For example, eating out at a restaurant usually means you can take advantage of the promotion. However, a £750 three-course meal isn’t a wise purchase if the air miles come to less than £50. Everything should be relative to ensure that you don’t overspend, or, on the flip side, leave money on the table.
Have you ever fallen foul of any of the above?
