Using credit card to finance business – credit card series

Credit card a plus if used in the right sense. There are plenty of business activities that you can support, if you use your credit card properly. In the post about disadvantages of using credit card for your business, I talked about how using a credit card in an incorrect manner lead to huge losses for your business and liabilities as well. Credit card rates in India normally range for 30-40% annually and 20-30% globally making credit card one of the most costliest sources of fund. An overused , maxed out card can blow a hole in your finances. In this post , I am going to show you some of the ways you can use credit card to not only fund your business but also increase productivity as well.
  1. Credit card may be used to fund your short term needs

  2. The best use of credit card is to not roll the credit over to next billing cycle. A rolling balance makes you liable to pay 1-3% on total outstanding monthly. The best use is then to use it in such a way that you are able to pay the card balance in time. You may use CC for e.g. when you are expecting a customer payment to happen before your billing cycle so that you can pay back in time. In short term, it is the most convenient way to fund any activity. Just don't forget the payment
  3. Use credit card in emergency

  4. Sometimes, you need urgently to pay for something and searching for an ATM is not an option. It may be used for repair of a broken down, an urgent flight or immediate medical expense. Normally, you might have another card(a debit which can be used to withdraw cash) but if it is too urgent , use your credit card without a thought. After all it is for your convenience.
  5. Use when you don't have other options

  6. Let me take an example. Almost all the website take credit card. If you have a bank account and no credit card, you might find purchase on internet almost impossible. Also a transfer from a bank account might not be instantaneous. If your business needs something immediately, you should go ahead and use your credit card. In this way your work will not be hampered and you can make most of your card
  7. Use to gain side benefits

  8. You should use your credit card for buying personal goods(assuming you are allowed or your card is a personal card) whenever possible. When you book an airline ticket for e.g., you might get a lot of additional miles, if your card supports that. You may use these miles to upgrade yourself to a business class seat or buy additional tickets for your family members. In addition to that a lot of card companies provide additional points for every purchase. You can use these points later on for your own personal use.
  9. Use when you don't have any spare cash

  10. It is extremely unlikely but sometimes you do not have enough cash to cover all the immediate expenses. A credit card can be used to cover the situation at that time. However you have to be careful not to overuse the card as there are huge fees involved in overdraft. So use your credit card only when situation becomes unavoidable.