A credit card has emerged as one of the most basic and vital financial products these days. A large number of applicants apply for a credit card daily.
As you read this, a large number of people are already using this plastic money to manage their various expenses.
Various studies suggest that there are more than 37 million active credit card users in India. Such a large number denotes that credit card features work wonders for users and hence, they rely on it for diverse spending. It is also the same for a business.
Using your credit card for business needs can offer many benefits:
- The credit card is a convenient source of revolving credit
- Business owners can use it when they face some cash crunches
- Having a strong Credit Score can help you apply for other types of loans at lower interest rates
If you don’t have a credit card yet, you can shop around to compare all credit card deals avail the best credit card features. Nowadays, leading banks and other lenders let you apply online for their best credit cards.
However, even after you get a credit card, you should take it out as a last resort. It is because a credit card debt attracts a higher interest rate.
If you wish to know some tips on how to use credit cards to grow your business without issues, then read on to explore more.
Easy tips to use your credit card for business’ growth
1) Ensure to pay off the balance every month
As discussed earlier, credit card debt happens to be more expensive than other types of business financing. Hence, you should ensure to pay off the entire balance of the card each month. It will help you keep off paying high-interest rates and penalties.
Pro tip – Don’t use your credit card to consolidate other debts because credit debts attract higher interest rates. Hence, it may be taxing to clear off the liability in the long term.
2) Set proper guidelines for card’s usages
You need to know when and when not to use a credit card for business purpose. You should create a checklist about the purchases that should be made with a credit card and which one to avoid. Doing this will help you to prevent the mismanagement of the credit card.
Pro tip – Apply for a credit card that can offer you more than one credit card for a single account. This way, you can get pre-set limits on the second one to control how much anyone else can spend on it. But, it comes with the demerit of credit card information being misused by another person in your company. Hence, you should consider all such threats before applying for a second credit card.
You can go ahead and apply for credit card that may suit your business needs in many ways. Bajaj Finserv is a reputed NBFC that offers several industry-first credit card features clubbed into their Bajaj Finserv RBL Bank SuperCard.
3) Make significant investments with the card
Growing a business could be done in many ways. You can review your business plan and think what purchases are vital to take it to the next level.
Pro tip – You can use the credit card to invest in tangible assets such as laptops, printers, and office equipment.
4) Avoid cash advances
It is one thing to use a credit card to make way for buying inventories and settling the business bills. It is another aspect to use it for a cash advance to pay salaries. Cash advances attract higher interest rates, and you may find it tough to repay later.
Pro tip – Using a credit card for payroll purposes shows that your business is floundering, which may not be good at all. Hence, avoid it at all costs.
You are now aware of some tips on how to use credit cards for the growth of your business. If you can implement the discussed tips properly, then using a credit card for business growth won’t lead you into soup.
If you are ready, you can submit an online application for your credit card.
Leading lenders such as Bajaj Finserv offers pre-approved deals on credit cards, personal loans, home loans, and other financial products. Such offers are created to make your loan procedures hassle-free and fast.
You can share your basic details like name and mobile number to check out your pre-approved loan offers now.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. You can find Gaurav onLinkedin.