Chapter 5
Credit Cards
Essential Idea: Use Credit Cards to Fund Your Business
Credit cards can be one of the best ways to fund a business because they are both easy to use and so flexible. When used intelligently, credit cards can really be a boon to your business. You just need to be smart about it.
Back when I was a practicing lawyer, my specialties were business and bankruptcy law. The vast majority of my bankruptcy clients had one common denominator: they got in over their heads with credit card debt. These folks certainly never planned on this, of course; in fact, most loved and appreciated their credit cards. Indeed, many had credit card indebtedness that was not unreasonable at all, but something happened in their life to tip the balance:
- Maybe they lost their job.
- Or possibly they got divorced.
- They may have had a medical emergency.
- Maybe they were sued.
Whatever the case, all of a sudden that manageable credit card debt became unmanageable and there they were, sitting in my office.
The one exception was Joe (name changed). I remember him vividly because, while he too had his share of credit card debt, he was just so different than the rest. Debt was not his problem and not why he hired me, although at any given time, he had plenty of debt.
No, Joe hired me for my business expertise. Joe wanted to expand and needed help negotiating a lease on the new facility. But when he told me that he was planning on financing his business expansion with credit cards, I nearly blew ...
