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Avoiding_the_Pitfalls_of_Business_Credit_Cards

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					Title:
Avoiding the Pitfalls of Business Credit Cards


Word Count:
551


Summary:
For startup entrepreneurs having an excruciatingly difficult time raising capital for their project, borrowing
against business credit cards becomes a very real temptation; and sometimes, it is the only option
immediately available. The caveat is that if you do not manage your business credit cards wisely, you may
end up failing in the venture that you have long wanted to establish.



Keywords:
credit cards, business, amex, american express, credit card offers,



Article Body:
For startup entrepreneurs having an excruciatingly difficult time raising capital for their project, borrowing
against business credit cards becomes a very real temptation; and sometimes, it is the only option
immediately available. The caveat is that if you do not manage your business credit cards wisely, you may
end up failing in the venture that you have long wanted to establish. Without proper management, the debts
that one incurs from business credit cards will simply pile up.


Business credit cards undoubtedly are very convenient to use. The moment you get approved for business
credit cards, you get a guaranteed credit line that you can use virtually anywhere, anytime you need it. In
spite of not having the cash, you can purchase what you need for the business with your business credit card.
The convenience that business credit cards provide can also be the pitfall; and to the unwary user, business
credit cards can be dangerous.


Knowing that business credit cards can be dangerous does not mean to say that you should not resort to
using business credit cards to prop up your business. The key thing in minimizing the danger is to use the
business credit card wisely, or to use it within bounds.


You might be too excited about a new business and get carried away about making more money and having
a better life. But wait! Have you ever considered your fallback options should things not work out as you
expect them to be? Remember that filing for bankruptcy is no longer an attractive option; the bankruptcy
laws have been amended recently, and it is more difficult now for debtors to escape creditors in this way.


There is a way to avoid the debt trap. You should keep track of purchases you charge to your business credit
card — which you can easily do by logging onto your account at the business credit card issuer’s website.
You should then work out your payment plan in advance by estimating your cash flow per month, and using
this figure to calculate how much you can afford to pay against your business credit card debt. Pay off the
entire business credit card balance as often as you can afford to. If that proves difficult to do, try to pay more
than the minimum required payment for each month. This is the only way you can stay ahead of finance
charges and the very painful bite of late payment fees and default APRs. Unless you have already arranged
to remove the personal guarantee you signed in favor of your business, anything that happens to the business
credit card account will have repercussions on your personal credit report.


It is necessary – and quite educational, really – that you do comparison shopping on trends in business credit
card rates. You must educate yourself about how you can effectively use the float period on purchases, the
fees for cash advances and late payments, over credit limit charges, balance transfer fees, and penalties for
late payments. Then, there are also the annual fees: some business credit cards charge annual fees while
others do not. There is a lot of information about business credit cards on the huge variety of websites
devoted to the subject. Manage your business credit cards well, and they will help you finance your
business.




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posted:1/4/2012
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