As a small business owner, you have probably received a multitude of business credit card offers in the mail. Business credit cards can be a valuable resource for a small business. A business credit card provides business owners with a financial cushion when sales are slow or customer payments are late.
Business credit cards are advantageous because they are convenient, they provide rewards and incentives and business owners can easily qualify. However, business owners with credit cards should use them wisely. Understanding the common mistakes of business credit cards can help you avoid serious financial issues because of misuse.
A common mistake business owners make with business credit cards is overspending. Not having the ability to curtail your spending can cause your company to suffer from financial strain. Your cash flow is limited because cash is constantly leaving your company to pay your credit card bill. Overspending can also lead to additional fees and hurt your business or personal credit score. Business owners should create a budget and know up front what expenses should be paid with a business credit card.
Another common mistake is using a business credit card for personal purchases. A business owner is asking for trouble when they start mixing the finances for their business with their personal finances. Using business credit cards for personal purchases also skews your company’s financial statements because items are included in your financial records that do not pertain to your business.
Business credit cards come in all kinds of shapes and sizes. Credit limits, interest rates and incentives vary per credit card. A common mistake of business owners is failing to thoroughly research the terms of credit cards before applying. Some credit cards have interest rates that fluctuate, especially at the end of the introductory rate. Some business owners find themselves in financial difficulties because they are unprepared for an increase in interest rates. Understanding the terms before applying for a credit card can help prevent any unexpected issues.
Before applying for a business credit card, it is imperative that you understand the pros and cons.
UnsecuredBizLoan.com provides well-researched information about business credit cards and can help you apply for one that will benefit your business.
To apply for funding for your small business, use the form on the right to begin the application process.
For more information, go to Business Credit Card at http://www.unsecuredbizloan.com/business-credit-card