Thursday, September 11, 2008

Credit Cards!

One bit of advice I always give to my clients is to use a credit card for business purchases, especially a credit card that offers rewards. One reason for this recommendation is obvious. However, there are more reasons than you might think.

First, using a credit card to pay for business purchases is a good idea because it buys you as much as 20-25 days of float before actually paying for the purchase. Most credit card companies offer a grace period for you to pay for your charges without paying any finance charges. Second, having a credit card gives you access to financing, as little as it may be, to help grow your business. Many small businesses only need a small amount of capital to get their business up and running. Third, using a credit card wisely can help you build a solid credit score. It is critical that credit card balances are paid in full each month, otherwise your credit card debt will grow quickly and soon will become overwhelming.

Lastly, a credit card is one that can offer some type of reward or benefit for using the card. Many of the best credit cards offer travel rewards, points for use at retailers, cash back awards, and much more. Some issuers offer low APR credit cards. Regardless of the reward type you choose, why not leverage your business purchases and get something back in return!

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