Get Your Business Funded: Creative Methods for Getting the Money You Need

Avoiding Common Credit Card Problems

Whether you use your own personal cards or business cards, it still remains true that understanding how credit cards work and how to avoid some common pitfalls makes sense.

Credit card basics. When using credit cards in your business, the things to be most concerned with are:

• How much you charge.
• What the interest rate is on your outstanding balance.
• How you can pay off the balance as soon as possible.

Of course, as indicated, teaser rates are best. A teaser rate is an introductory interest rate offered by a credit card issuer to get your business. The first question to consider when looking to use a card with a teaser rate is how long the rate will last. Sometimes teaser rates can last up to a year; other times they may be for only three months.

One businesswoman was once offered a card with a great teaser rate and a $5,000 limit. She accepted, got the card, and attempted to transfer $5,000 from a different card with a higher rate onto this new, lower card. But the transfer check bounced. Why? The new card charged a $10 transfer fee, so she went over her limit by $10. The card issuer then assessed her a $25 “bounced check” fee to boot! She had a balance of $35 and had never used the card.

One way to keep your payments low is to get the teaser rate extended for as long as possible. Here's how: before the rate is set to expire, call up the card-issuing company and ask them to extend the rate for another six months. Many will. If they refuse, ...