Running a Small Business on Credit Cards
Business credit card debt is on the rise. There are more small businesses running their business on credit cards now than ever in the history. Americans who would never consider having a balance on meaningless spending often will max out credit cards for the simple reason of keeping their business afloat. If you view your small business like a loved one you will spend whatever it takes to keep it going. But your business is not a loved one and this unwise credit card spending process could end you up in bankruptcy court.
Here is a story that you might learn from. There was a small business owner named, let`s say "Sue". She started her small business with a small amount of cash, some credit cards, and a lot of prayers. Sue knew her business would not make money right from the start so she prepared for such, maybe prepared too well.
First off the promising location she sought out didn`t exactly end up being as promising as she planned. The business expenses compounded faster than she expected them to. She used every penny she had and then some to buy products and to pay a couple of employees.
Soon her credit cards were tapped out and she couldn`t afford to make the minimum credit card payments at the end of the month. Sue had one choice, file for bankruptcy. She came to the realization after the fact that "I was like a drug addict looking for my next fix. I would borrow money and were I could. I just didn`t want my business to fail!"
If you want to avoid the same fate as Sue keep your eyes open and do the following:
Do your research on your competition, your market, and your expected income revenues. There are books available at your local library or the Small Business Administration`s site at www.sba.gov
After you have researched your plan and wrote down the plan in detail, you can try to get long term, low rate small business loan from a local bank.
If you must use credit cards to start your small business try to avoid using more than 60% of your available credit or you can quickly go deep into credit card debt.
You should have an idea of when you will break even and if you don`t break even by the set date you should close the business!
Credit Card Debt Consolidation Benefits
The benefits of consolidating your credit card debt are many, with one of the most important being the peace of mind you'll have when you need to make just one payment a month, all while getting in control of your credit card debt. If you have good credit, you can also benefit by being able to negotiate a lower interest rate. After all, the 0% rate is usually introductory, but depending on how much money you bring onto the card, the credit card company may respond by offering you a lower interest rate. No matter what, getting in control of your debt and your spending, although hard to do at first, will eventually offer you a great sense of accomplishment.