Managing the Unmanageable; Taming the Business Credit Card Beast
The mere mention of the words “credit card” sends shivers down the spines of a lot of people, me included.
With thousands of individuals and businesses filing for bankruptcy each year, there is just too much negativity associated with credit card. Can’t say I can’t blame them though, reality really does bite. Indeed, more and more people find themselves drowning in an ocean of debt from over extending their credit limits.
Ironic because credit cards were supposed to help them run their businesses better by providing them higher credit limits, lower interest rates and easier repayment terms, found more trouble from a thing that should in the first place free them from financial constraints.
Bear in mind that a business credit cards can be compared to any other financial instruments, in the sense that it operates by the principle that conscientious use will help it, while the opposite would have disastrous effects. In fact, this could very well be the golden rule by which you run your finances – whether personal or corporate.
Business Credit Card Best Practices: Some Examples to Emulate
Do away with business credit card hopping.
Hopping from one business credit card to another would give you more headaches than the intended freebies and perks. You may have been meaning to take advantage of each deal, but this could have adverse effects both on your personal and business credit rating .
Take advantage of (but don’t go beyond) the Grace Period.
Most business credit cards provide their clients a 21-day grace period before they are asked to pay for the total charges they incurred that month. For entrepreneurs, this is much appreciated leeway as 21 days is more than ample time to reinvest that money and gain profits out of it.
However, it isn’t advisable to pay your business credit card bills on the last day of the grace period. Perhaps it would already be viable to settle the amount after 15 days. This gives you the best of both worlds as reinvesting your money for another 15 days would give you a higher profit yield, while paying your business credit card bills a week earlier would guarantee that you won’t incur any charges for late payments.
Do Online Payment Transfers
If you’re really pressed for time and are afraid to miss the payment deadline, you can have your business credit card account enrolled to receive online bank transfers or payments.
Some banks even have auto debit features which are ideal since the full amount us always settled at the close of every billing cycle. This saves you heaps of money you would have otherwise had to pay for finance charges and compounding interest.
The problem with paying the conventional way is the amount of time involved for such a simple procedure. It would take you at least an hour to travel, fall in line and have the teller process and validate your payment transaction. Whereas, if you paid your business credit card bill online, it may not have even taken you one full minute!
Moreover, over the counter bank payments do not get credited to your account until the next day or a few days after.
Tags: Managing the Unmanageable, Taming the Business Credit Card Beast