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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