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Throughout history there have always been people that have been willing to take the risk of getting extra benefit through the utilization of extra risk. The first people to lend out money through unsecured credit cards were part of that lot of people and interestingly enough so were people that used good credit cards to run their business.
Any slight error of accounting could end up putting these businesses in huge debt and whenever a business is in huge debt there is always going to be the risk for bankruptcy and the ultimate death of the business.
Therefore using these types of credit cards was a risky proposition for many a business but for it to become accepted as being proper somebody indeed had to be brave enough to step forward and gladly take that first risk.
Nothing worth having in life comes without some kind of effort or risk and the concept of the small business credit cards really does show this. It is a credit card that can help you immensely but also something that can very quickly become a burden should your accounting be even slightly off.
People that have small business credit cards and have had them for a period of time indicating that they have grown used to them are part of their business will tell you that they have been absolutely indispensable to them and at the same time have also been extremely useful in giving them benefits that they weren’t initially expecting.
These came in the form of the credit card rewards and other things and the end result was that the cost of their business actually ended up favoring their bottom line and augmenting it. When you’re dealing with something like that then all of a sudden it becomes very easy to see exactly why people nowadays absolutely love using their small business credit cards.
There are tales of caution to be had however because there are small businesses that have gone under even though they were using the best business credit cards. By understanding what the good people love so much about their cards and what the bad people did in terms of mistakes it becomes a lot easier for you to get benefits out of your cards whilst reducing the risk. This article aims to give you both sides of this sometimes confusing story.
There are many different advantages as previously stated in utilizing a credit card in order to help you with your business. A small list of these advantages are listed below for your convenience and once you have had a chance to peruse this list you will likely be able to come up with more advantages just by virtue of associating lines of thought with the different advantages listed here.
Get a piece of paper and write down all those additional advantages and likewise do that with the disadvantages section that follow.
Advantage #1: There are times in the running of a business where it is actually prudent from a growth point of view to go into temporary debt. If you are looking for funds to open a store for example and you believe that store will be booming in business right from the time it is opened then assuming your calculations are correct you can afford to go into debt for a month with the understanding that the first profits from that store will come back to pay off the debt you are in.
To even be able to get into a situation like this you need your cash flow to be free. Good credit cards serve to do exactly that; make your cash flow free.
Advantage #2: There are many times during the course of doing business that cash really doesn’t cut it. In this day and age where you can even apply for a credit card online there are many times a business is going to need to use the internet and in order to buy anything over the internet in any kind of manner even remotely convenient you simply need to use a credit card.
There are no two cents about it. Small business credit cards provide you with the convenience that you need in order to make these things work out well for you.
Advantage #3: Credit card rewards. If you currently have a personal credit card then chances are it has a rewards program of some kind. This rewards program will really allow you to gain some of your money back or alternatively save up for a vacation of some kind. You can do the same things with small business credit cards that have credit card rewards attached to them with the difference that these credit cards will be benefiting your business directly. In other words, you can generate additional funds for your business by doing nothing more than simply doing business.
Now indeed comes the cautionary part of the tale. This is the part where we discuss two of the most important cautions that a person needs to be aware of. These are both concerns that are going to be present even when the best business credit cards are being discussed and for that reason you really need to be cognizant of the risks involved.
As previously mentioned, jot down any extra disadvantages that you can think of on your piece of paper and then once that is done you can compare the advantages and the disadvantages.
Disadvantage #1: This is a disadvantage that is ever present with a number of different credit cards and it has to do directly with the fact that credit card companies give these credit cards out because they are hoping to make money. Unless you are distinctly aware of that fact then you might be tempted to run up a balance and if you do this then even good credit cards will hit you with interest charges. This is a situation that could very quickly get out of control for you.
Disadvantage #2: Fees associated with your credit card might actually end up wiping out any benefits you would get from the credit card rewards. This would not be the first time that a credit card company has tried to pull something like that and the best way to protect yourself from it is to be aware of it.
Once you are aware of the specific problems that are inherent to this type of a model you can make sure that you avoid this particular type of model. Read all of the fine print and do all of your homework in order to make sure that the credit card you eventually invest in is able to do it for you.