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Credit Cards

Provided by Visa, Content Partner for the SME Toolkit

Small business use of credit cards has increased exponentially during the past decade and for good reason: credit cards provide short term access to cash to help with cash flow management and you earn value through incentive programs. (It's hard to argue with a funding solution that provides you with a free cell phone or computer.) At the same time, there's a potential downside to credit cards. As with all funding solutions, you need to borrow prudently and avoid burdening your business with high-interest debts.

Before you reach for the plastic, consider these issues.

Some considerations to keep in mind when using credit cards:

  • Keep current.
    You shouldn't use a card to borrow with if you can't stay current with your bills. Those perks may not seem as appealing as your debt mounts and you're chasing a high interest rate.
  • Pay attention to interest rates.
    When shopping for a card, review competitive interest rates and be wary of teaser rates (low introductory rates that jump after a few months).
  • Don't borrow if your credit card balances are greater than 80% of your credit limits.
    If they are, you've already got a credit card problem.

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