Smart Business Credit Card Usage

Smart business credit card usage may be one way to keep your creative business solvent as you continue to test new products and services in the market. It can also keep you and your business from incurring large sums of debt. After all, consider that the total amount of consumer debt in the United States was $2.43 trillion as of May 2011 according to the Federal Reserve and as reported by Credit Cards.

Making Smart Creative Business Credit Card Decisions

American Express, a credit card that markets to the small business sector, is one of the top four most widely used credit cards in the United States. However, because of American Express’, card usage policies credit associated with the card was at $48.9 million as of 2010 instead of $269 million or $171 million, what Visa and MasterCard held respectively as of the end of 2010. Visa cardholders also held more debt at $397 million.

After the banking industry collapsed in 2007, more small business owners used credit cards to pay bills. In fact, by the close of 2009, 64 percent of creative business leaders used a small business credit card. Another 41 percent of creative business leaders used a personal credit card to pay one or more business expenses. Staying abreast of all charges placed on your credit cards as well as dates you plan to make payments on the cards may help you to pay off any revolving debt associated with the cards in one year or less.

Short of getting an American Express small business charge card, to keep the amount of debt associated with credit cards you may own, think about:

Setting a limit on the amount of money you will place on your small business or personal credit cards each month
Creating a budget and including the deadlines by which you will make credit card payments
Securing credit cards at the lowest introductory and long-term interest rates
Using credit cards that have rewards associated with them (approximately 60 percent of consumers have a credit card that issues rewards to cardholders)
Only applying for credit cards that have no or low fees
Working with vendors who don’t charge you additional fees to pay for purchases using small business credit cards

If you get credit cards with low interest rates through your bank, you may be able to pay your monthly credit card balances with the click of a button, simply transferring funds from your checking or savings account toward your credit card balance. Your bank might also offer lower introductory and long-term credit card interest rates than a major credit card company.

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Sources:

http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php (Credit Cards: Credit Card Statistics, Industry Facts, Debt Statistics)