Credit cards have generally taken a bit of a PR beating over the last several years, and for some outstanding reasons. Interest rates tend to run from very high to rates that a few years back would have embarrassed Vinnie, the loan shark. No, it’s still true that your best bet for financing your new business is to grab the traditional multiple brief cases full of files and head to your local bank for a business loan. However, there is no getting around the fact that loans remain difficult to get even for people with very good credit.
You may need to be both very creative and a bit lucky to finance your business. Such options as crowd sourcing and other innovations have become more popular lately for a reason. Even so, there may be a point where credit cards are simply the only alternative for some quick emergency funding. Think of your cards as fire extinguishers and never as water fountains. It might be somewhat safer in terms of protecting your personal finances if the cards are in the name of your business but, for that very reason, they tend to come with higher interest rates.
If you end up partially subsidizing your business via plastic because of a sudden emergency, your best recourse is simply good old fashioned common sense. Obviously, considering the interest rates, you want to pay off these debts as quickly as humanly possible. Even more obvious, if you can’t pay your credit card debts all at once, you need to be absolutely certain to make your minimum payments on time.
In case you somehow haven’t heard it by now, credit card companies have an extremely nasty habit of radically raising your interest rates if you are late on even one payment. We’re talking briefcases full of cash here. That is, of course, on top of a late fee. If this happens for some reason, be sure to call up the company as soon as possible and, of course, send in the minimum immediately. Sometimes the fees, at least, will be waved. It never hurts to ask nicely but it’s much better to not let this happen in the first place.
