If you are planning to apply for a large loan soon, it’s best to avoid credit card hopping so your score will be as high as possible. Opening new lines of credit will also lower your credit score, so it’s not wise to get new cards often. If you are switching to get rewards points you won’t use, or a lower introductory interest rate even though you pay off your cards before they accrue interest, there’s little benefit. Consider whether it’s really worth making the change. You should also take careful note of annual and transfer fees. However, you will need to thoroughly research the card before you choose it. Cards often have introductory offers, and opening a new card account can allow you to take advantage of these. Hop cautiously – or not at all.Ĭredit card hopping is when you go from one card to another to get perks or rewards – like cash back or zero-interest periods. It can also negatively affect your credit score if you miss a payment. This makes it difficult to keep track of your expenses and profits come tax season.
It can be tempting to make personal purchases on your business card or business purchases on your personal card. Choose a date when you will have increased cash flow to make your credit card payments. Review your books each week, and note when your revenue is highest. This gives you an idea how your company is doing and helps you monitor your cash flow. You’ll need to watch your financial statements closely when utilizing business credit cards. If your business floats thousands of dollars on a card, you could face a substantial bill when the introductory offer ends, costing you even more than the initial offer. Some offers require only a small amount of spending – like $3,000 – while others demand $20,000 or more.Ī promotion can also end abruptly, leaving you blindsided. Using racked miles or points usually require you to meet a spending threshold within a certain time frame. All offers come with strings attached, so read the fine print carefully. Some advertise zero interest, while others entice applicants by offering thousands of points for new signups. Watch for introductory offers.Ĭredit cards attract new users with all sorts of promises. To avoid spending too much time optimizing card spending, find one or two cards that cover your specific needs. As competition for business credit heats up, a few card companies have begun to allow businesses to design their own bonus categories. Different cards offer perks for shipping, advertising and travel. Explore the market to see which cards offer the most relevant benefits for your company.įor instance, if you travel infrequently – but spend a lot on shipping – do not obtain a business credit card that offers frequent flyer miles. These perks can include discounts on travel and lodging, or preferred pricing for services. Many business cards include benefits that traditional financing sources don’t offer. Maintain constant vigilance to avoid turning a helpful tool into an added expense. Credit card interest rates fluctuate based on the market, unlike traditional loans, which means you can easily negate future gains by paying higher fees – even if you think you’re beating the system. This should be common personal finance wisdom, but it’s easy to get so involved with growing your business that you fail to recognize bad habits until it’s too late. You should only use credit cards if you can do so without carrying a balance from month to month. Banks make little money off exchange fees, but they make much more when their customers get into a cycle of debt.
Don’t pay interest.Ĭredit cards can help your business by quickly raising capital. To get the most from perks without suffering the drawbacks, take the time to learn the ins and outs of business card financing.Ĭonsider these six tips when leveraging credit cards to finance your SMB: 1.
BUSINESS CARDS USING MY LOGO WINDOWS
Cash back, interest-free periods and 60-day floats can help a growing company take advantage of short windows of opportunity. However, credit cards provide significant advantages for responsible borrowers. If you turn to high-interest credit cards during hard times you could make a bad situation worse. Interest rates tend to be extremely high compared to other funding sources, which means you could spend more than your company earns. Just because your company makes regular payments on its credit cards does not mean you are using them wisely. Finding the right balanceĬredit cards offer plenty of advantages, but misusing these beneficial tools can quickly turn them into burdens. If you have employees, it is important to create a business credit card expense policy to ensure cards are being used wisely.
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