How to effectively use credit cards in business

Credit Card

Credit Card (Photo credit: 401(K) 2013)

How to effectively use credit cards in business

by Ross Tav

An entrepreneur must use credit and use it wisely. With credit cards, the business owner can enjoy plenty of benefits without much risk. Here is a quick guide for listing the benefits of using a credit card for a business.

Cash flow

When running a company, one must understand the importance of solid cash flow. In fact, this is the most important financial aspect of a small business. With a credit card, one can pay for goods and services future. Remember, when receiving the bill, a person has up to three weeks to make the payment without paying any interest.


A credit card company usually offers cash back or points. For a big spender, the points can add up quickly. The great thing about rewards programs is that there are plenty of options. A business owner can collect airline miles via an Avios Credit Card, gift certificates to a store or even get cold hard cash. Over the months and years, this can add up to thousands of dollars in free stuff. Without a doubt, this is one of the greatest benefits to using credit, especially when a customer considers that he or she will spend money regardless of which method they use.

Interest free

When a company needs to make a large purchase, they often do not have the funds on hand. Luckily, many banks and finance companies offer customers zero percent interest credit cards. Usually, the company will offer this for a set period. Over time, this can save the company hundreds, if not thousands, of dollars in finance charges. Remember, one must make the minimum payment while carrying an interest free loan from the credit card company.



When using a check or debit card, one will not enjoy much security. On the other hand, with a credit card, a consumer can shop online or in person without fear. This is a serious benefit as many companies have experienced fraud and have paid dearly. One must realize that when using other methods they will not recover their funds until after the investigation. With credit cards, the consumer will not be on the hook for the charges provided the charges were fraudulent.


In trying to attract more business, some of the major issuers will extend the warranty for a product. In offering this, the bank will usually add one or two years to the manufacturers warranty. This is a nice benefit for a company that buys expensive electronic equipment. Remember, without protection, one will have problems getting their broken item repaired or replaced.

When used wisely, credit cards can help a business owner organize his or her finances and make more money. Fortunately, a new entrepreneur should have no trouble using credit wisely.

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