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How to Use Credit Card Financing Properly as a Small Business Owner

How to Use Credit Card Financing Properly as a Small Business Owner

If you’re considering using credit card financing to fund your small business it’s important to understand how to use them properly if you want to experience the biggest benefits they have to offer. Most other blogs and articles focus solely on using credit cards properly from the perspective of choosing the credit cards with the best interest rates or rewards. In addition, they focus on how the CARD Act can benefit users of credit card financing for small business. However, what they don’t focus on enough (or at all) is the two most critical key factors that make using credit cards for business even more beneficial than just the best interest rates or rewards. Those critical key factors are:

  1. Treating your personal credit as an asset by protecting and preserving it. You can protect and preserve your personal credit profile by implementing good credit management techniques such as making timely payments and keeping low balances on your revolving accounts (i.e. your credit cards).
  2. Separating your business credit from your personal credit. You can separate your personal credit from your business credit by choosing the right credit card provider. When seeking a credit card provider, ask them several important questions to determine if their credit card is right for you:
    • Will you report my credit card usage to my personal credit profile?
    • Will you report my credit card usage to my business credit report so that I can start building my business credit profile?

If you still can’t decide if a credit card provider is right for you after asking these questions, you may want to consider seeking expert help to help you make the appropriate decision.

Reap the Benefits of Being a Credit Card Holder

Only after you understand and act upon these two critical key factors will you be able to reap the benefits of all of the other important credit card features including interest rates, rewards, and maximizing tax benefits. Below is a list of the key benefits you can experience from the aforementioned:

  • Interest Rates – By protecting and preserving your personal credit and choosing the right credit card provider, you can experience interest rates as low as 0% for the first 6 to 12 months. This means that you have earned the privilege of using capital to grow your business without paying interest on the funds during the next 6 to 12 months of operation – saving your business a tremendous amount of money for the year.


  • Rewards – By choosing the right credit card provider, you will be able to experience reward points or cash back rewards. Reward points enable you to earn points on each purchase you make. Those points can go towards the purchase of additional items (such as supply purchases) from selected merchants in the future. Cash back rewards, are just that — cash rewards that can vary from $25 to $1,000 (or more) depending on the credit card provider. You can usually get a cash back reward after charging a certain amount on your credit cards during a specified time frame. For example, some credit card providers will give you $150 cash back if you spend at least $1,000 in the first 3 months.


  • Maximizing Tax Benefits – Choosing the right provider can also help maximize your tax benefits. For example, some credit card providers track all of your spending online to help keep you organized. You can print and use the reports to file your taxes at the end of the year.  If you use the credit cards frequently to cover your business expenses, it will make it easier for your Tax Accountant to help you determine what you can write off on your taxes.


It would be wise to put into action the two key critical factors to using credit cards properly – treating your personal credit like an asset and separating it from your business credit so that you will get the best interest rates and rewards when you are ready to apply for credit card financing.

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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