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Should I Use Credit Card Financing to Fund My Business?

If you’ve ever considered using credit card debt to start a business, there are a few considerations to be made. Although all credit cards come with debt, interest fees, and possible annual or miscellaneous fees, there are significant benefits to utilizing your card to get everything off the ground. A credit card is an effective borrowing tool to get your business off the ground.

Credit Card Debt - Business Funding

Knowing the Benefits

  • Credit Score – The chance to increase your credit score as the card owner and overall business is greatly heightened, as long as payments are on time, of course. Checking your credit score is much easier than before, and if you have access to a business credit card, utilizing it moderately and keeping up with payments will help your businesses credit score skyrocket. Understanding the difference between bad, average, good, and excellent credit may make a difference in getting approved for other cards.
  • Rewards – Most credit cards have benefits and rewards when you make purchases using the credit card. Usually, that includes earning cash back depending on the specific benefit program associated with that card. More so than that, a benefit for business owners that travel globally, is protection when abroad and may be something to consider when choosing your card.
  • Easily Attainable – The application for a credit card is done mostly online nowadays. The minimum qualification for a card can often be very reasonable and easy to obtain. Even with a fair credit score, you can qualify for various ‘basic’ level credit cards on the market that may not offer benefits and reward but will be easier to qualify for and give you a chance to get started with credit.
Credit Card Financing - Business Funding

Understanding the Risks of Credit Card Financing

Just like with most things there are risks that accompany the benefits of using a credit card. Reading and understanding the terms and conditions and any liability agreement connected to your card is vital so that you’re not caught off guard and left with a personal debt if the business closes down. Be mindful of how often you’re using the credit card to fund items for the business and make sure to stay on top of your repayments to mitigate risk as much as possible.

In many cases, you can find credit card offers that are interest free for the first 12 months; however, following that period, the APR isn’t going to be low. In short, utilizing a credit card is best case scenario for a temporary solution, and not long-term.

When Starting It Up

If you are just starting out within the business world, you most likely don’t have the company credit to get a credit card to start your own company. If that is the case, then it may be an option to use your personal credit to jump start everything. Although this may come with considerable risk, applying for a loan, or acquiring investor funding may be difficult.

woman in business - credit card debt

Top Credit Cards for Businesses in 2019

There are general rewards available for business owners to profit from when they apply for a credit card. Among those including air miles, hotel specials, cash back, etc. and depending on what you’re looking for cross-referenced with what your business needs are, will determine which type of credit option will suit your needs.

Below are some potential options to consider:

  • KBC Credit Card – Some of the features include an instalment plan option, 1% cash reward, 0% interest on any transferred balances, low variable rate, flexibility with various methods of online pay including Google Pay, Apply Pay, Fitbit Pay, etc.
  • Avantcard – 0% on money transfers for 9 months, balance transfers on 6 months, and purchases for 3 months, are part of the benefits including global access for traveling, and interest free credit for a limited time.
  • AIB Classic Visa Business Card – The advantages for this card include selecting a credit limit, beginning a card liability waiver insurance plan, cash-free purchasing, protection abroad, contactless payments, and even more.

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