It's certainly no secret that credit card companies are clamoring for our business and are in constant competition with one another to get it. And, when it comes to being approved for a business loan, it's definitely easier to obtain a credit card if you need the funds to try your hand at becoming an entrepreneur. But, like most things, there are also disadvantages to consider as the easier it is to get credit cards, the easier it is to abuse them and find yourself drowning in debt just a short year or so down the road.
The savvy business owner, regardless of the actual type or size of business they run, loves to earn money while making money, and it is possible to do just that using a credit card for your start up business efforts. Most all major credit card companies, including MasterCard, Visa, Discover, and American Express, have several programs tailored specifically for small business owners that will vary by incentives, benefits, and of course, the interest rates. The trick lies in finding the one, or two if need be, that would be the best for your particular type of company based on what you'll be using the card for the most.
Will traveling or meeting with clients be a prevalent aspect of your business? If so you'll want to consider a credit card company that rewards its cardholders with perks or incentives based around travel, such as frequent flyer miles or discounts toward hotel stays and car rentals. If, on the other hand, you will be conducting business from a home office or other location and will need to buy equipment, whether it be computers to work with or inventory to sell, you'll want a card that offers money back on purchases made as an incentive.
Introductory offers with zero percent interest for a certain length of time are a rather attractive incentive for the start up business owner as they allow one to not only finance their venture, but also give them the time to turn a profit before accruing interest. The zero percent interest deal also may carry over to balance transfers up to a certain amount in some cases, allowing you to consolidate your debt onto one single card, and hopefully, paying off the balance before the intro period expires.
The only caveat to this plan is remembering to read the fine print to find out what the interest rate will be once the intro period does actually expire, and when. Paying no interest for six months and then being hit with a fifteen to twenty percent interest rate to finance the rest of your start up costs hardly seems like a good idea, especially if you've yet to turn a profit.
Make it a point to keep your business credit cards separate from those you have for personal use and you'll thank yourself when tax season inevitably rolls around. When it comes to your finances and reporting your earnings to the government, you definitely do not want to mix business with pleasure. In fact, the IRS, otherwise known as the Internal Revenue Service, is said to be cracking down on the small business owner, particularly those working from home, to ensure that the deductions being made are actually for business purposes and not simply as a way to pay less taxes by shading the areas between work and home expenses.
Having a business credit card account, and separate bank account as well, not only eliminates any possible hassles or questions when it comes time to itemize your business expenses, but it also allows to you finance your venture while earning incentives at the same time.
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