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Using a Business Credit Card for your Startup:
A Wise Idea?

The idea may seem very awkward to some people. You are just incurring debt for your dream startup and moreover, you have to pay high interest on the accrued amount. However, you may not believe but some of the today’s most famous businesspersons used business credit cards to finance their startups. For instance, we may talk about the legend of the two Google founders - Sergey Brin and Larry Page, who used plastic money to fund Google in the middle of 1990s. However, they were very careful about their spending limits. They bought used computers and open-source software, and the result is today before us. At present, Google is one of the world’s most profitable internet companies.

According to Curtis Arnold, founder of, "A lot of famous businesses started in the basement using personal credit cards to get the business off the ground."

Making use of business credit cards to fund a new business startup has both risks and rewards. If the venture succeeds, you will be easily able to repay the amount accrued but if the venture fails, you may find yourself standing before a credit card consolidation company or in a bankruptcy court circumnavigated by your creditors.

Credit Cards Provide Easy Funding for Start-Up
Nowadays, it is undoubtedly business credit cards that are the easiest source of funding for young entrepreneurs. Moreover, it is the fastest and hassle-free way of acquiring money for your venture when in need. Before 1990s, having high credit card balances used to be considered as a black mark and a big question on your ability to grow your business. By the late 1990s, everyone started using credit cards to finance their businesses. However, by 2007, this became the norm, a part of the customs.

However, after the financial crisis of 2008, it has now become a bit hard to secure a business credit card as many lenders have tightened their lending criteria. However, you can still avail anything between $50,000 to $1000, 000 if you have decent income and a good credit score. Moreover, as long as you are making the monthly payments on time, you need not worry about the credit limit.

Risks of Using Credit Card to finance your startup
Whenever using personal credit card rather than business credit cards, you remain on your own and walk as your heart wishes. However, this lack of impartial oversight can appear as the prime case of the failure of your business. Moreover, if you have credit cards for financing your business, you may simply invest on any idea that is actually not at all beneficial. Again, if you have business credit card, you can easily get tempted to spend money on things that are not at all adjacent to the business. For example – an expensive business lunch.

The issue of credit score
If you max out your business credit cards to fund your business, you may see a blow on your credit score. Though not drastically, you may see your credit score lowering as a result of too much debt on your credit report. But if you really take care of this matter and keep the balances as low as possible, chances are there that your credit score will be slightly affected. However, if you make use of your credit cards prudently, this can prove to be a good bet for your business. Therefore, before arriving at any conclusion, shop around for the best credit cards and best rates and then fly with your ideas.

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