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Good Credit Card Use Tips that You Need to Know

Last updated 5 years ago

Credit cards are often an important tool for small business owners trying to grow their businesses, but they can also spell disaster if not used correctly. As a small business owner, you have to consider two sides of credit card usage: how much you pay for credit card processing and how you use your own cards. Keep credit card usage issues at bay with these tips:

Be Realistic about Spending
You may feel a lot of pressure to spend money to grow your business, but relying on credit cards to speed up your company’s expansion is risky. A survey by the Kauffman Firm found that small businesses increase their odds of failing by 2.2 percent for every $1,000 of debt they take on. Before you charge something on your business card, ask yourself if you will realistically be able to pay off the bill. If you’re counting on your expenditure to generate enough profit to pay for the charge, you probably can’t afford it.

Get Personal
As a small business owner, your company’s expenses can’t be entirely separated from your own. In fact, some small business credit card activity is reported to your personal credit report. Scrutinize your business expenses the same way you would your own. If you’d settle for a less expensive office chair at home instead of reaching for your credit card to buy a more expensive chair, then make the same call with your small business card. Remembering that your business moves could have personal repercussions can help keep your spending in line.

Pay It Off
The best way to manage a small business credit card is to pay it off every month. Paying only the minimum payments can put your company behind the curve quickly. If you don’t think you can pay off the bill every month, chances are that you’re making unnecessary purchases.

At Merchant Advocate, we can help you make smart decisions about the other side of small business credit card usage: the processing fees you pay when your customers charge their purchases. Let us find the best possible rates and save you money, year after year. Contact us at (732) 727-2073 to learn how we can help you.




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