6 Credit Card Tricks Every Entrepreneur Should Know
For every business, whether small or big, cash used as a capital is a very important resource. In an effort to maintain bottom lines at an increasing level, business owners often decide to settle for less and get contented with revolving a small working capital.
Some businessman, though, is not aware that in order to increase net income, one must spend more through the infusion of more capital. With that logic, a businessman must not focus on saving a little to gain a little in the future. You can always use credit lines or credit cards for your business.
Here are some credit card tricks every entrepreneur should know:
Establish a Good Business Credit Score
While personal credit cards come in handy and easily available to finance start-up businesses, it’s also better if, at an early stage of your business, you can already establish a business credit separately from your personal credit.
This step protects your credit score from declining or registering a bad credit history if the business wasn’t able to repay your personal credit card.
How are you able to establish a credit history? First off, it involves you to report accounts with payment history to a commercial credit agency. For startup and small businesses, it’s an easy step to get a business credit card. It is because the approval is initially based on the entrepreneur’s personal finances and credit.
Choose the Right Card that can save you a lot of Interest
Capitalizing on your startup business by solely using credits or loans isn’t always a good way to do so. This is because you might fall into some serious financing problems along the way.
Try seeking out other ways to fund a business, be it through an investor, a family member, a capitalist partner, or your own savings. That way, your business need not deal with huge interest rates on credit cards.
Nonetheless, you can still use credit cards to make small inventory purchases, but ensure that it’s paid on time to avoid high interests. If credits are really needed, look for a perfect credit card that does not charge very high-interest rates and comes with competitive freebies.
We are not saying it’s not good to use credit cards in the business. You just have to choose the perfect one for you, with lower interest rates.
Take Advantage of Introductory Zero-Interest Offers
Let’s go for this example: you need a computer set with printers for your new office on your new business. The fees cost you $10,000. That’s a huge capital considering you’re just about to start a business.
That’s where credit cards are of advantage for you. There are credit cards that offer sales installment plans with zero interest rates. These installment plans allow you to pay equal principal payments for a long time without your credit card charging you interests.
These are usually offered when you initially use your credit card. Just ensure that you pay in full before the offer expired, or get prepared for huge interest rates for any balance you left.
So if you ever need to purchase an item that costs a lot and you want to save on interest expenses, make that zero interest credit cards of best advantage to you.
Maximize Your Business Credit Card Cash Back Rewards
What is a credit card cash back? It is an existing program for credit card companies to lure their cardholders to use their credit card. While it is a marketing strategy for credit card companies, it is of great advantage to the user.
This is of course also advantageous to your business, especially if you spend a lot on overhead or operations. Cashback are a portion of your purchases credited back to you in the form of cash, or as a discount on your purchases.
Cashbacks are way better than miles points as the latter can only be used to purchase airline tickets or book a hotel, while cash back can be as good as cash that you can plow back in the business as capital.
Benefit from Employee Purchases
This applies to those with trusted employees when it comes to finances. These trusted employees can be an extension of your business credit card, and empower them to do purchases using the card. That way, they can easily procure items needed without having to physically disturb you to do so for the company. Plus, purchases made by them will add back to your freebies and cash back rewards.
Take Advantage of Hotel and Airline Credit Cards
This one is for businesses that require frequent travels for business purposes or for recruiting clients. This will save you costs on travel expenses by availing points for free airfare or hotel stays.
With the proper use of credit cards, it can help your business increase capital while also giving you and your business perks applicable to the business operations.
Please note, however, that business credit cards can only help the business so much as long as no balances are left that could possibly compound interests. It can either harm or do well for your business depending on how wise and strategic you use your business credit cards.