Businessmen, who are new to the world of entrepreneurship, are advised by every experienced person to maintain a distance from credit cards in order to fund their business. This is because as these people struggle to gain a strong foothold in their business, and when money is not flowing in as smoothly as it should, using the credit card for entrepreneurial reasons can only hamper their growth prospects. As you learn the tricks and trades of your business, it is best to avoid any overhead liability in the form of credit cards, as it will just increase the burden of debt on your pocket.
This said and done, it is almost impossible to repeal from the magnetic pull of credit cards, especially in the initial stages of business. With the responsibility of establishing a business, comes a number of expenses, and new businessmen might flinch from using cash-for-hand for all petty or immediate expenses. But the major reason why you are asked to stay away from credit cards is simple: in case your business fails to gain popularity, you would be stuck with spending all your start-up funds towards your credit bills. Also, since credit cards offer little or no margin of error, you will be stuck with shelling out large bills of money towards interest, let alone the principal amount. If you exercise ample smartness and restraint in the use of plastic money, then profitability will never be a far-fetched goal. As you take your first little steps in the world of entrepreneurship, you can rely on credit cards to bridge the gap between the time their orders start flowing or when an investor is keen to fund your business. As you may get tussled and turned against the unexpected tides of business, credit cards can provide a safe haven to protect you in your most trying times.
If your business works out or not, you will face the same interest rates, and fines and penalties, as a consequence for late and delayed payment. There aren’t going to be any additional benefits either way out of the tunnel. In order to have a smooth transition into business and the world of credit cards, remember that prior planning is an irreplaceable segment of the entire aspect. When you begin the initial stage of your business planning, try and gather every credit card offer that comes your way. This will help you get some pre-approved credit to your name, which will be accessible in times of need. Before you sign yourself up for any deal, conduct extensive research on the credit card, and its inherent terms and conditions. Inspect your credit card statements regularly and report any doubts or clarification to your bank’s 24 hour help line. Never leave your job in the initial stages of business, with the hope of living off credit cards until your business kicks in. Your steady and regular flow of income will cushion you against the turbulent nature of business. If you are planning to have partners in your business, ensure that they possess an equal share of the credit card debt too, since it is used for business purposes.
Always remember to use credit cards as a temporary instrument, rather than a permanent money providing tool. Use it with cautious restraint in times of urgent money requirement, and keep funds ready at the time of monthly payback. Borrowing loans, personal loans etc is not the option by which you should pay back your credit card debt. Opting for institutionalized sources of funds that cater to businessmen at lower rates of interest is a better option. However, this requires a lot of pre-planning as you may not get funds from them in a quick manner. Thus, when in business, be smart with credit cards.