What Are the Risks of Using Credit Cards for Business?
While credit cards can be beneficial, they also come with risks:
1. High-Interest Rates: Credit cards often carry high-interest rates, which can lead to significant debt if balances are not paid off in full each month. 2. Debt Accumulation: It can be tempting to rely on credit cards for funding, but this can quickly lead to unmanageable debt. 3. Impact on Personal Credit: Many entrepreneurs use personal credit cards for business expenses, which can affect their personal credit scores and financial stability. 4. Cash Flow Issues: While credit cards can temporarily solve cash flow problems, relying on them too heavily can exacerbate financial issues in the long run.