In addition to the benefits, of course there are also disadvantages when using a credit card for business capital that you need to pay attention to.
Here are two disadvantages to using a credit card for business capital.
Higher Interest If Compared to Business Credit
Usually, banks apply the highest credit card interest compared to other loans such as SME loans.
SME loan interest usually only ranges from 1% to 2% per month, while credit card interest can even reach up to 3% per month.
Therefore, even though credit card debt is used as a productive debt for business capital, you still have to bear the high interest.
There Are Threats to Debt
Maybe the use of credit cards as business capital is fairly simple. How to do it is very easy and practical. However, the fact is not that easy.
As is known, credit cards have a due date that must be repaid every month. In addition, credit cards also have other costs that need to be considered and analyzed if you want to use a credit card as business capital.
In the use of credit cards there are also things that can bring you to unpleasant things like being in debt. For example, you are in the condition of your business that has not provided sufficient benefits.
The worst possibility is that you cannot close your credit card installments. Finally, you cannot pay your debt repayments on time.
If so, then you must also be prepared to bear a large penalty or interest bond. Such large interest rates can burden your finances later.
Moreover, if you have experienced late payments, then in addition to large interest rates, you will also have other negative effects. Like, you will be difficult if you want to apply for a loan to the bank because your credit history is no longer good.
Therefore, you have to think through the strategies that you use if you choose to use a credit card as your business capital.
Using a Credit Card for Business Capital or Not?
Using a credit card for business capital has advantages and disadvantages. Before using a credit card for business, of course, you must know the advantages and disadvantages.
If you want to get the benefits, of course you also have to be prepared to bear the loss of what can happen.
Therefore, before you make a decision whether you want to use a credit card for your business capital or not, you have to think carefully about it, do not want to profit even stump.
So are you interested in using a credit card for business capital? Please provide your comments and opinions in the fields provided.