Business Credit Card
If you’re a small business owner, you know that part of the joy of being in business is being able to set your own schedule and work with the people you want on projects that are both interesting and profitable. That said, there’s going to be a time when you need to expand either your equipment, your services or your office.
This is when a business credit card can definitely come in handy. However, many new business owners make the mistake of trying to get one without first having a clearly defined business plan. Not only that, but they make the mistake of putting all of their expenses on this card and quickly realize that when times get tough, they can no longer pay it back.
This is why it’s important to figure out exactly when you should get a business credit card. The main reason that a good business succeeds is that it follows a specific plan with achievable milestones. So, if you have a six-month milestone by which you want enough profit that you can expand, then you will more likely achieve it and hold yourself accountable. This is where you can also consider getting a business credit card.
Remember to make sure that you have steady and increasing profits before you take on what is essentially unsecured debt. You always need to remember that a business credit card is not your money – it is your lender’s money. You are simply borrowing against the amount.
Of course, you want to make sure that you really need to get a business credit card as well. If you can comfortably pay for whatever upgrade or update you need for your business with cash, then you should do so. The only time you want to look at a business credit card is for items that you would not be able to pay for with cash. You may want to get a smaller balance so that you can use it to pay for overdue bills or other emergencies that crop up from time to time. This allows you to take care of small expenses while ensuring that you don’t run into too much debt.
A business credit card can be of great benefit to your long-term business and financial goals, but only if you have a clear plan for what you will use it for.