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5 Things To Consider Before Using Credit Cards To Finance Your Business

5 Things To Consider Before Using Credit Cards To Finance Your Business

Credit cards are convenient and can be valuable for a business which needs a temporary infusion of cash. The Federal Reserve observes that in 2009, 83% of small businesses used credit cards, with 41% using personal cards. Despite this massive use of credit cards, small business credit cards only account for a small portion of small business debt, as most business owners have the sense to pay back their credit card every month.

However, there is more to using a credit card for your business beyond “pay the credit card back at the end of the month.” Here are 5 tips which any business should know about credit cards before you just decide to use your MasterCard to buy office supplies.

1. Know the difference between personal and business credit cards

There is nothing wrong with using a personal credit card to handle business expenses, but you may want to get a business credit card instead.

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Business credit cards have some key advantages if you are a small but expanding business. You can have copies of the same business credit card, which will let you and your subordinates make purchases on their own. Paying off business credit cards also improves your business credit, which will make it easier to get loans on better terms. On the other hand, business credit cards lack the consumer protections of personal credit cards.

If you want a more detailed list of the differences between a business and personal credit card, NerdWallet has an excellent article on the subject and which one may be right for you. At minimum, do your research on which one your business should go with.

2. Look for the best rewards plan

Don’t just go with the first credit card plan that looks alright. Many business and personal credit cards offer unique rewards which will be well-suited for your particular business. For example, if you or your workers have to travel a lot, then a card which offers airline or hotel perks would be ideal. If you drive a lot, then gas rewards would be great.

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Also compare monthly fees, interest rates, and what the payment plans are. If you are worried about credit card fraud, you should also see what protection plans are offered.

3. Never mix up personal and business expenses

Even if you decide to stick with a personal credit card, you should never use the same credit card to buy office supplies and groceries.

The big reason is for bookkeeping purposes. When it is time to pay back your credit card at the end of the month, it can be tricky to figure out what goes under business expenses and what does not (if you mix them up on the same card). By keeping separate cards, you can know exactly how much your business spent without needing to go over every single item.

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Furthermore, if you go with a business credit card, using the business credit card for personal finance shows a lack of seriousness about your business. Keep business to business, and your personal expenses personal.

4. Be careful with who has your business credit card

As noted above, one of the advantages of a business credit card is that you can make multiple copies and hand them to your employees. If you have an employee who makes large purchases, giving him a company credit card means that he can pay for business expenses without having to front his own money and wait for a reimbursement.

Obviously, you should not just hand those credit cards out. Business credit cards should only go to employees who regularly make big or important purchases for the company, or for those who are away from the office.

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It’s important to trust and verify. If an employee uses his business credit card for personal expenses, your business will be held liable. While you can obviously fire him, abusing a company credit card is not a criminal offense.

5. Use your credit card as little as possible

Credit cards can be useful as an emergency cash resource, and can help track your expenses. However, there are risks to becoming dependent on them.

A small business will always have funding options. Talk to investors, ask your friends and family for funds, and tap into personal accounts. Even a bank loan’s interest rates will normally be lower compared to a business credit card.

Conclusion

Credit cards have value for some of the reasons noted above. Plus, spending a certain amount and paying it back every month can improve your business credit rating. Remember, if you use it too heavily, or if your business suddenly hits a downturn, then you can find yourself facing mounting high-interest debt, which will destroy your business. Try to avoid using it for big purchases unless you have no other option.

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Last Updated on September 23, 2020

Do What You Love and Love What You Do to Achieve More

Do What You Love and Love What You Do to Achieve More

Are you waking up each day looking for that perfect thing, activity, or job that will make your life work? Or, maybe you are looking for that perfect relationship. Once you “get” this new thing that will allow you to do what you love, you are sure that you will be happy forever.

In reality, life doesn’t work like that, and we would probably get bored if it did. There is likely no one thing, experience, or activity that will keep you feeling passionate and engaged all the time. What’s important is staying connected to what you love and continuing to grow in the process.

Here, we’ll talk about how to get started doing what you love and achieving more in life through the motivation it brings. Doing this doesn’t have to take a long time; it just takes determination and energy.

Most People Already Know Their Passion

So many people walk around in life “looking for” their passion. They look for it as if true passion is some mysterious thing that is difficult to find and runs away once you find it. However, the problem is rarely lack of passion.

Most of us already know what we love to do. We know what excites us, even if we haven’t done it for years. Instead, we focus on what we think we “must” do.

For example, maybe you love building model cars or painting pet portraits. Yet, each day you work a completely unrelated job and make no time for the activity you already know you love. The truth is you probably don’t need to find your passion; you just need to start doing what you already know you’re passionate about[1].

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No Activity Is Exciting All the Time

Even people who are living their dream lifestyle or working their dream job don’t love it all the time. Every job or lifestyle has parts of it that we won’t like.

Let’s say your dream is to become an actress, and you succeed. You may not enjoy the process of auditioning and facing rejection. You may experience moments of boredom when you practice your lines over and over again. But the overall experience is totally worth it.

Most of life is like that. Don’t set yourself up for disappointment by demanding that life be perfect all the time. If things were perfect and easy, you would ultimately stop learning and growing, and life would begin to lack even more meaning in that case.

Be grateful for both the good and bad moments as they are both entirely necessary if you genuinely want to do what you love and love what you do.

Doing What You Love May Not Be Easy

Living a life you love is unlikely to be easy. If it was, you would not grow very much as a person. And, if you think about a great book or movie, the growth of the main character is what matters most.

What if the challenges you meet along your path to living a life you love were designed to make you grow as a person? You may actually start looking forward to challenges instead of dreading them. An easy life hardly ever makes a compelling story.

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If you struggle to overcome challenges, try writing them down each time you encounter one. Then, write down three ways you could tackle it. Try one, and if it doesn’t work, try another. This way, you’ll learn what does and doesn’t work for you.

How to Do What You Love

There are many small steps you can take to ensure you are making time to do the things you love. Start with these, and you’ll likely find that you’re already on the right track.

1. Choose Your Priorities Wisely

Many people claim they want to do something, yet they don’t do it. The truth is they might not really want to do it in the first place[2].

We all end up following through on what matters most to us. We make decisions moment by moment about what we need to focus on. What we choose to do is what we deem most important in our lives.

If there is something you claim you want to do but you don’t do it, try asking yourself how much you really want it or where it’s currently placed on priority list. Are there other things you want more?

Be honest with yourself: what you currently do each day is a reflection of your priorities. Recognize that you can change your priorities at any time.

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Make a list of your priorities. Really take the time to think this through. Then, ask yourself if what you are doing each day reflects them. For example, if you believe your top priority is spending more time with your family, but you consistently take on extra hours at work, you’re not really prioritizing things in the way you think you are.

If this is happening, it’s time to make a change.

2. Do One Small Thing Each Day

As stated above, doing what you love doesn’t have to mean finding that perfect job that makes you want to jump out of bed in the morning. If you want to do what you love, start with one small thing each day.

Maybe you love reading a good book. Take ten minutes before bed to read.

Maybe you love swimming. Get a membership at the local YMCA, and go there for thirty minutes after work each day.

Dedicating even a short amount of time to something that brings you joy each day will improve your life overall. You may find that, over time, a career path related to what you love to do pops up. After doing the thing you love each day, you’ll be more than prepared to take it on when the opportunity arises.

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If you need help making time for your passions, check out this article to get started.

3. Prepare to Make Sacrifices

If you are an exceptionally busy person (aren’t we all?), you may have to make sacrifices in order to make space for the things you are passionate about. Maybe you take on less extra hours at the office or take thirty minutes away from another hobby in order to develop another that you enjoy.

Looking at your priority list will help you decide what can get put on the back burner and what can’t. Remember, do this thinking about what will help you feel good about how you’re spending your time. 

For example, if you love writing but rarely make time for it, consider getting up 30 minutes earlier than normal. Or instead of browsing your phone for 30 minutes before bed, you can write instead. There is always a way to find time for what you love.

Final Thoughts

If you love what you do, each day becomes a joyful adventure. If you don’t love what you are doing, life feels like a chore. The best way to achieve success is to design a life you love and live it every day.

Remember, doing something you love doesn’t have to include big gestures or time-consuming projects. Start small and grow from there.

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Featured photo credit: William Recinos via unsplash.com

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