Credit Card Finance – Advantages, Disadvantages and Tips
Advantages of Credit Card Finance
Speed – Credit cards are quick and easy to use, even if you are abroad. You can access finance up to your credit limit at any time, making them very useful for dealing with unexpected costs.
Flexible – You can use credit cards to pay for things as you need them, last minute or unexpected costs can be covered without as much worry about your cashflow; as you are given up to 56 days before paying interest. Though you should always pay off as much off the credit card balance as possible to avoid interest building up.
Manageability – As all the purchases made on credit cards are listed (online and in bills), they make it easier to keep track of purchases than cheques or cash which involve keeping numerous receipts. Id you provide employees with a credit card then it becomes much easier to keep track of their purchases, and advise them where purchases may not be considered suitable expenditure by you.
Disadvantages of Credit Card Finance
Cost – Most credit cards have relatively high rates of interest compared to loans and other finance; this means that if you allow interest to accrue the cost of using credit cards can be very high.
Expenses Control – If you give a credit card to an employee, they are able to pay for expenses and other costs instantly. Whereas if they had to pay cash you could ensure that they do not get their money back for items you consider not to be expenses.
Credit Card Finance Tips
Payback Quickly – The quicker you pay back your balance, the cheaper a credit card will be for your business. Paying only the minimum payment will mean paying large amounts of interest, and mean a much longer repayment time.
Find The Right Deal – There are many different credit card deals out there, and depending on how you expect to use your card, some will be more suitable than others.
Charge Cards – A useful alternative to credit cards are charge cards. These work slightly differently, in that you still get a number of day’s free credit, but must pay off the full amount each month. These help to ensure you do not get into the habit of paying less than the full amount each month and end up paying lots of interest.
Is my business eligible for Ashley Retail Finance?
You can get up to £25k from your future credit card sales. You can use the the cash for any business need whether that is working capital, opening additional locations, refurbishment of premises, equipment purchases, marketing and advertising, additional stock purchase, VAT, PAYE, rent, wages or any other business need you may have. Find out more
Article Index:
- Using Credit Cards for Business Finance
- Credit Card Finance – Advantages, Disadvantages and Tips
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