Business credit cards can really be a double-edged sword.  They can prove to be helpful from time to time, but they can also get small businesses into trouble if they don’t know how to use them effectively.  Don’t let yourself get caught up in the stress of credit card debt.  Here are some helpful tips to ensure that you are using your credit cards to your advantage and not letting them get you into financial trouble down the road.

  • Businesses should not feel that using a business credit card is an outlandish idea. It is actually very reasonable.  That is if the business plans to pay the entire bill off at the end of each month to avoid high finance charges and fees.  After all, business credit cards can actually help to build up credit, which is important for businesses.
  • At first, credit cards should only be used to make small purchases. This is the best way to help improve credit scores.  If you build up your credit some, you will likely be able to get a larger line of credit.
  • Don’t use your business credit cards to pay for too much at one time. Make sure that you plan out each purchase.  It is a good idea to stagger your purchases over a few months of time to ensure that you are able to pay them off in a timely manner.
  • If you plan to purchase things to pay off over a longer time period, you will want to make sure that you choose a business credit card that offers a good interest rate. You don’t want to just choose the first card that is offered to you.  Compare rates, and change lenders if you have to so that you can get the best deals possible.
  • If you plan to allow employees to use the business credit cards you want to make sure that they are aware of what can be spent on the card and what should be paid for upfront. This will help to prevent credit card abuse from your employees.  Also, ensure that they bring you all receipts so that you can monitor spending on the cards.

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