If you’re a business owner, here are some Credit Card tips you must always keep in mind.
Misusing your Credit Card can cause more damage than you think. It not only damages your Credit Score and the chances of getting your loans approved in the future, but it can be a potential threat to your business too. Don’t believe us? Once you are done reading this article, you definitely will.
Running a business is no walk in the park. You need to keep up with changing market trends, constantly modify your strategies and keep a lookout for your competitors. With all this and a lot more happening constantly in your head, there’s less or no time/energy left to focus on other things. It significantly increases your chances of making huge Credit Card blunders without even realising how destructive they can prove for your business.
Additional Reading: 8 Steps To Start Your Own Business
To avoid the possibility of bad Credit Card habits ruining your business, here’s a list of things you can keep in mind.
Personal? Not Really
If you think your personal credit has nothing to do with your business, think again. Before approving your Credit Card or loan applications, lenders are most likely to pull up your personal credit records. If you’ve been using (abusing) your Credit Card, not paying the bills on time and always making the minimum payment, you could get into trouble.
It won’t reflect well on your Credit Report and will also significantly reduce your chances of getting a Business Loan approval later. You can’t risk it when it comes to business as it’s a game of uncertainties. No matter how well you plan it, there’s always the risk of things going downhill. The market might crash when you least expect it to, or your competitors might suddenly take you by surprise and launch something that affects your business immensely.
You can’t leave all this to chance. In case you happen to face any of these situations you’ll probably consider applying for a Business Loan. But thanks to your ‘not so pretty’ personal credit history, it may not get approved.
Being Dependant On Credit
Relying on credit is an option that shouldn’t be exploited beyond limits. Especially if your business is still in its infancy stage, you need to avoid taking unnecessary credit. Saving up well before you actually start your business and keeping an emergency fund in place can always save you from trouble.
With these options handy, you don’t need to rely fully on credit. This doesn’t mean that you shouldn’t take financial help if your business needs it. It simply means that you need to time your loans right and keep your other financial commitments in mind before opting for one.
Additional Reading: How Late Credit Card Payments Affect You
One Credit Card For Everything
Keeping just one Credit Card isn’t the smartest thing to do. Depending on your needs and lifestyle, you need to opt for different cards. For instance, if you tend to travel a lot, apart from your basic Credit Card, an Airline Credit Card will make more sense for you.
Similarly, if you shop a lot, look for cards that offer great discounts and rewards on shopping. Choosing your plastic mate well can help you save a lot in the long run. Since you’re running a business, you could also give Business Credit Cards a thought.
Additional Reading: 5 Credit Cards To Help You Sink A Hole In One
Underestimating The Power Of Rewards
Are you one of those people who think that Credit Card rewards don’t actually make much difference? If yes, this needs to change right away. If you choose the right Business Credit Cards, you can actually enjoy a wide range of rewards and other benefits.
These rewards might look tiny in the beginning, but if you let them pile up, you can actually save a lot. Your Credit Card choice can make a large difference here. Ensure that you are aware of all the benefits and drawbacks before taking up any new Credit Card offer.
Not Understanding The Power Of Segmentation
If you want your business to enjoy complete benefits of your Credit Card, you need to consider segmenting your expenses. It simply means that instead of relying completely on one plastic buddy, you need to make some more friends.
Start by identifying your needs (personal and business) and segment your main expenses accordingly. Try looking for Credit Cards that offer you better benefits for your individual (specific) expenses. This approach will help you balance and make the most of both your personal and business Credit Cards.
Taking Fraud Risk Too Lightly
You may be smart, but there are fraudsters out there who are smarter than all of us. The only way to protect your Credit Card and your business from them is by being extra vigilant while using your plastic buddies.
Ensure that all your crucial financial information and documents are kept in a safe place at all times. Be extra vigilant while exchanging financial details with your clients/vendors. Being extra careful here can help you majorly in future.
Additional Reading: Hit And Run By Credit Card Fraud? Here’s What To Do
If used right, a Credit Card can prove to be a boon for your business. But taking it too lightly could also potentially kill your business. Better to be careful than repenting later, right? In case you’re still looking for the perfect business partner (the plastic one), we have a lot of awesome cards to choose from.