Benefits Of Using Credit Cards For Your Small Business

For many years I shied away from using credit cards for my small business. First of all, I was proud of myself for using cash and avoiding debt. Second, I didn’t want to have to manage another bill. Last but not least, I also didn’t want to get myself into financial trouble. Wasn’t it better if I only spent what I knew I had? Although those are three solid reasons NOT to use credit cards, my mind has since been opened up a little. If any of the above reasons ring true for you and you don’t trust yourself to handle credit with purpose, then abort and continue using cash only (no shame)! For those who are considering credit, here are my three favorite benefits of using credit cards for my small business.

Credit Profile – Benefits of Using Credit Cards For Small Business

So what happens if your situation changes and you DO need a loan or some capital for your business? While a bank or lender will generally take into consideration your volume and personal assets, it is helpful to have a credit profile for your business. It may be hard to imagine now, but your small business may become big. What is it going to take to get there and what are the things happening a long the way? Establishing a good solid credit history can be important. There are a few ways to do that, and regularly using and then paying off a credit card is a good one.

Cash Flow – Benefits of Using Credit Cards For Small Business

Sometimes I need to invest in something for my small business and don’t quite have the cash. Or I do have the cash, but would rather not dip into my savings. This could be a piece of equipment or a marketing idea. I have found it useful to put that on a credit card. My own personal rules regarding purchases like this are:

1). One purchase/investment at a time

2). Pay it completely off before investing in something new

I have been able to make more money and grow my business by using my credit cards strategically to elevate my business. It is a red flag if you are using credit to make ends meet or if you are piling things on your card before paying them off.

Rewards – Benefits of Using Credit Cards For Small Business

This one may seem silly, but the rewards are REAL. You can choose from many different types of rewards. These include cash back, airline miles, travel bonuses and more. Another great idea is to use your points to purchase incentives for employees such as gift cards or movie tickets. My only advice here is to compare the benefits and then stick with one so it is not difficult to manage and you are actually able to use them.