Startups and small businesses usually need credit to meet their financial needs but loans are not always useful. Banks and money lenders offer loans with strict requirements that most businesses are unable to fulfill due to the lack of good credit history. That’s why small businesses are using credit cards to keep their operations running smoothly. Credit cards are one of the best ways to fund small businesses and meet other operating expenses. However, a business must use this financing option wisely in order to not build credit card debt.
Below are some proven ways small business owners and companies can get more from business credit cards to meet their financial needs and keep the business operations running.
Don’t Pay Interest
A credit card could be the best and quick way to fund a business. Banks and other financial companies make a little money by offering credit cards to their customers but it could be more than imagination when a cardholder gets into a big cycle of debt. That’s why experts always suggest the use of credit cards when you are able to make payments every month without carrying a balance to the next month. Use of interest free credit card is also a great way to fund your small business as you will not be required to pay interest amount for a given period of time. However, you should apply for the right credit card as per your individual business needs. In this way, you will be able to prevent turning this financial tool into an added debt.
Optimize Card Spending
Business credit cards come with amazing perks that a traditional loan cannot offer. These benefits may include reward points, discounts on online purchases, cashback and interest-free promotion periods, etc. A business must d proper research to find out the right card with the most relevant benefits as per their needs and requirements. For instance, if you travel frequently for business purposes, you should apply for a card that offers free air mileages. Since different card providers offer a variety of benefits, you should optimize your card spending accordingly to get more from your credit card. It will also help you avoid unnecessary and unproductive spending to save business money for productive things.
Watch Introductory Offers and Terms Carefully
Card providers attract more customers by offering different sorts of promises and benefits. Some offer a 0% interest rate while others offer sign up bonuses and cashback. All these offers come with terms and conditions that a cardholder must apply to prevent additional fees and charges in near future. That is the reason, you should watch their offers and terms carefully to make sure you are not getting into card debt instead of financing your business operations. 0% interest promotions usually come for a short period of time and can cause you a higher interest rate once ended. Proper research and carefulness can help you use your card wisely to meet the financial needs of your business without building a cycle of debt.
Keep Checking your Financial Statements
Smart business owners always watch their financial statements on a regular basis. It not only gives them an idea of how their business is performing but also helps them monitor the cash flow. Checking financial statements also enable business owners to find out and prevent unproductive spending. Regular checking of statements like credit card reports is the best way to identify fraudulent payments if any. In this way, a business can avoid serious financial pitfalls. Furthermore, monthly reports can also be used in the business budget planning process for months to come. Banks and other financial institutes send monthly statements to their customers online via emails. It helps business owners watch statements easily even on their mobile devices.
Zero Balance Transfer Fees
There are business cards that come with no balance transfer fee. Such cards are usually named balance transfer credit cards. If you need to pay for some business costs and expenses, you can transfer a balance from one card to another so you can make payments easily without getting out of funds. However, you should choose the right credit card for balance transfer purposes so you can avoid any additional charges. You should also keep your personal and business financial transaction separate to avoid tax-related problems.