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How Small Business Credit Cards Can Help You Grow Your Startup

How Small Business Credit Cards Can Help You Grow Your Startup

As a startup business owner you might find it difficult to find a source of capital to grow your business. However, did you know that your startup can benefit greatly from the use of small business credit cards? That’s right, small business credit cards can be used to capitalize your business in a way that will take you from the startup stage to the existing business stage with ease. According to a study conducted by Keybridge Research, “small business credit cards are a major contributor to the success of small businesses and the U.S. economy overall, especially for early stage businesses. The study also found that:

  • Credit card lending to small business owners enables them to create at least one job for each $5,613 increase in credit card usage each month.
  • Between 2003 and 2008, an increase in credit card lending to small business owners resulted in the creation of 1.6 million jobs.
  • Between 2003 and 2008, an increase in credit card lending to small business owners resulted in $142 billion pumped into the economy. That would be considered around one quarter percentage point of total U.S. value added or GDP.
  • For every $1,000 in credit card use by startup business owners, it resulted in a $5,500 increase in company revenue.

Benefits of Small Business Credit Cards

The benefits you can experience by using small business credit cards to grow your startup business are endless. Furthermore, small business credit cards can often be obtained on an “unsecured” basis. This means that lenders usually will not ask to see your financial information (e.g. w-2’s or tax returns) or ask you to pledge collateral to get approved for small business credit cards. Many entrepreneurs seem to be aware of this and continue to take advantage of the many benefits small business credit cards bring to the table. According to the National Small Business Association, 2009 Small Business Credit Card Survey, 86% of small business owners reported that they used their consumer or small business credit cards primarily or exclusively for business purposes.

If you do decide to use credit cards as an early stage financing tool, taking the time to understand how to use them the right way would be a wise decision. Using them the right way will enable you to get the most benefits out of them. Here are several key points to remember should you decide to use credit cards to finance your business:

  • Separate your business from your personal credit. Using small business credit cards is the first step to keeping your business credit separate from your personal credit. The next step is choosing the right small business credit card. The key to choosing the right small business credit card is knowing how to choose the best lender to apply to (based on your needs). If you are unsure about which lenders to apply to, it would be wise to seek the help of an expert who knows the best small business credit card lenders to approach. An expert may be able to direct you to the lenders that will enable you to separate your personal credit from your business credit.


  • Implement good credit management techniques. If you obtain small business credit cards, be mindful of your spending habits. Do your best to use the small business credit cards mainly for revenue generating activities (e.g. advertising that generates sales or leads). Also try to make timely payments. Lenders will take notice of your good credit management techniques and reward you for it by increasing your credit limits over time.


  • Treat your personal credit like an asset. This encompasses separating your personal credit from your business credit and implementing good credit management techniques. If you choose the right small business credit cards (based on your needs) and manage the cards properly by making timely payments and using them mainly on revenue generating activities for your business, you will find that you are protecting your personal credit from the damage that negative reporting can have on your overall credit profile. This will make it easier for you to obtain financing in the future if you need additional funds to continue growing your business.

About Brittni Abiolu

Brittni AbioluBrittni is a millennial, entrepreneur, investor and philanthropist. She has a Bachelor of Science in Computer & Information Systems from the University of Detroit Mercy and is currently a student in the Master of Entrepreneurial Transactions program at Central Michigan University. She enjoys writing about her experiences over the past 10+ years as an entrepreneur and uses data and information from reliable sources to back up what she writes about. Through her writing she aims to educate other entrepreneurs on how to obtain capital and build successful businesses doing what they love.

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