Financing a Business on your Credit Card

When you are starting out a home based business, it can be extremely difficult to obtain a business loan through the usual channels such as through a bank or other financial institutions, even with a solid business plan and business knowledge backing you up. When all else fails, you can consider using your credit card to finance your business.

There have been many success stories of businesses funded through a credit card. But like all debts, it is important to keep on top of it, and always make your minimum payment each month, if you cannot afford to pay a larger amount.

Some benefits of using your credit card is that it is fast and quick. You don't have to wait for bank approval or wait until you have the cash flow to purchase supplies and/or equipment.

You can make your purchases on demand. And you do not have to wait for any check approvals or fill out check payment forms with suppliers, as many often require for new businesses.

If you use one of your personal credit cards for business only, it makes accounting easier as you can track expenses easily on your statement, along with your signed sales receipt copies.

By knowing the date your statement is mailed out, you can add extra time for when your purchases would start accumulating interest. By watching online for your statement to be printed and sent, you can then make your larger purchases after that date.

If you make any risky purchases, your credit card would protect you against non-delivery of goods, or when you receive damaged goods from suppliers.

And depending on your type of credit card, you can sign up for programs with your bank that will help you earn cash back, frequent flyer miles, cash towards vehicles, or even raise money for a variety of charities.

As with any credit card debt, you will want to watch it carefully. Use your credit card with the lowest interest rate, if you suspect you will be carrying a balance. You can also contact your financial institution to see if you can get your interest rate lowered.

While using a credit card to finance a business isn't always your first option, it is a viable solution for those who cannot secure a business loan through regular channels. Keep track of your debt, always pay your minimum payments, and pay it off as quickly as possible to avoid high interest rates taking a chunk out of your business profits

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