Are you using your personal credit cards for business expenses? Watch out for these risks!

We know a few small business owners who use their credit cards for business purchases. It is reasonable because of  convenience; however, the risks are not worth the reward. Here are some problems in Vernon, BC that we see entrepreneurs experience  and why you should avoid them.

High-interest rates

Credit cards typically have much higher interest rates than other forms of financing such as bank loans or other business loans. It can raise trouble in the long run if your business relies too much on credit cards. If you pay your credit card bills on time, there likely will be no issue. However excessive use of your credit cards will quickly wrap you into huge debts. Keeping tabs on your credit and payment is  easier said than done.

Low personal credit score

If something happens within your business and you are not able to pay your credit card debts, your credit can easily be tainted and ruined because of it. It would also make it difficult and expensive to get funding for your business. Worst of all, it could affect your ability to make future purchases for your family and business.

Missed or late payments

Businesses owners using credit cards to finance their business often end up paying late or missing a payment due to the difficulty of keeping track of multiple cards and finances. Usually credit cards are from different financial institutions; therefore remembering credit limits, payment dates etc can be difficult and confusing.. It can really make it tricky to pay on time and maintain  ideal credit.

Low business credit score

Some small business owners use personal credit cards because their business credit score is low and because of it they are not able to get a business credit card with a reasonable limit. Unfortunately, by using a personal credit card, they continue to keep their business credit low and get stuck without financing. We suggest using a business credit card even with a small limit in small increments to help build up good business credit.

If you are using your personal cards for your business and want to avoid these issues, then consider taking cash from Instant Loans Canada. We offer fast and affordable loans to consolidate your credit card debt (and potentially other debt). Apply online on our website, and you can borrow up to $50,000 the same day.

Call 1-250-275-4666 or (Toll-Free) 1-866-973-5214  today!

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