You always need to be ready for the unexpected as an entrepreneur. You never know when an opportunity or a challenge might arise that could change the fate of one of your enterprises.
This is one of the main reasons why credit is one of the biggest assets a skilled entrepreneur has at their disposal.
Both money lenders and angel investors will take a close look at your credit history before agreeing to work with you. And, even when you’re financing things yourself, using credit cards to help strategize and carry the load can be helpful – sometimes even necessary.
What kind of credit card advantages can you pull as an entrepreneur to help your business enterprises? Read on, and we’ll walk you through a few you that you should be aware of.
1. Get over the Hump of Initial Expenses
If you’re planning on launching a start-up or a new product, there’s no way around one truth: you’re going to need funds. Often, new enterprises are most expensive in their initial phase, where start-up costs can add up to significant totals.
Using business credit cards can help you get over the hump of these initial expenses and on the way with your new business or idea. There will likely be a program or piece of equipment you need to invest in that might be costly.
Using a credit card with a low-interest rate is sometimes more affordable than looking to a lender to help finance the purchase. This all depends on the expense itself, but many people underestimate how helpful a credit card can be in creating a realistic payment plan for big purchases.
You will need to be responsible in making and paying back this kind of purchase, of course. But almost every new idea will face some sort of start-up costs, and using credit cards wisely can help mitigate some of the difficulty involved.
For some purchases, looking for loans will be necessary. But in some instances, credit cards can be another viable option.
2. Save Big on Travel
Another always-present element of the entrepreneurial lifestyle is travel. Who knows where you might have to drive, fly, or take the train in order to meet potential investors, partners, and clients over the course of your new enterprise?
Using a business credit card can help you rack up on travel points and turn much of this traveling into free trips. Many business credit cards allow you to get discounts on plane and train tickets, and give you points towards free airfare when you spend elsewhere.
If you’re going to be spending lots of money regardless, it would be a waste not to use some of that spending power towards free travel rewards. Depending on the credit card you use, you may also get a range of other helpful travel benefits.
For example, you may be able to get discounted hotel rates, free rental car insurance, or a free bump to first class. Look into the fine print of your business credit card and see what kind of deals you may be able to take advantage of.
3. Think of Cash Back as a Discount
Many credit cards these days offer ‘cashback’ made on any and all purchases. This can be very valuable to an entrepreneur who is making big purchases over the life of their business.
Entrepreneurs can use this cashback promise as a discount of sorts. For example, if your current credit card gives 2% cashback on all purchases, that’s 2% that you can imagine deducted from every business purchase you need to make. This may be a small discount, but eventually, the money saved on all of these purchases really does add up.
Different credit cards run cashback programs in different ways. Some cards give a general percentage back for all purchases, while some give higher percentages back but for specific categories of buying. Some may be a mixture of both.
If you’re still in the process of selecting a credit card, it can be very valuable to pick a card with a cashback program that will be most beneficial to the kinds of purchases you’ll be making.
You can also maximize the amount of cashback you may receive by utilizing different cards. You can open two credit card accounts, for example, and use the pertinent card that will provide the biggest reward when making a specific kind of purchase.
4. Use Rewards to Boost Morale
If you do get a lot of reward and cashback money from your credit cards, how do you want to spend it? Thinking of it as an upfront discount is wise, but some business owners decide to use the money in other ways.
For example, they utilize the reward money from their credit cards to help pay for end-of-year gifts for their employees. Everyone knows that keeping employee morale up is key for a happy and successful workplace. So providing new office chairs, giving gifts, or throwing a party at the office can all be very important.
These are expenses that sometimes feel hard to justify when the budget is tight. But allocating credit card reward money to these costs can help feel as if you’re getting to boost morale at no cost of your own.
Credit Card Tricks For Budding Entrepreneurs
If you’re just starting out as an entrepreneur, the above credit card tricks can be hugely helpful in getting your ideas up and running. Employing proper spending strategies can make the difference between a failed enterprise and a successful and thriving new business.
Need help managing money for your new business idea? Let us help. Reach out to us anytime for funding inquiries.