Is it ever a good idea to fund your business using a credit card? Compared to other types of small business financing, credit card costs can be surprisingly low. If you can’t get an SBA loan or traditional bank loan, credit cards carry interest rates considerably lower than alternative lenders.
That said, you have to be smart about using credit cards to finance your business. Keep these rules in mind:
-- Treat your credit card like a loan and make regular payments
-- Use balance transfers to consolidate debt
-- Make sure you can afford the annual fee
-- Clarify credit card usage with your business partner
-- Use different types of cards for different business purposes
Would you ever consider using a credit card to fund your business? In what circumstances do you think it becomes an effective option? What’s your advice on using credit cards to fund a small business?