Credit cards can be good or evil depending on how you use them. In this post, I will try to explain and site an example on how we used our credit card as a source of capital for our business.

In Book-Magazine Entrepreneur : How to Finance Your Business, Equity vs Debt financing was discussed. This is not wholly from the book but I would like to borrow the concept of debt as a source of capital. If using your credit card is a form of debt, you use it as a source of capital?


Me and my wife do direct-selling as part-time business. This is mainly to sharpen our skills on sales but not necessarily to replace our day jobs as our bread and butter.

For a couple of times now we've realized how to make use of our credit card. This will not offset our annual membership fee, but also provide additional income for the family. That could be an extra 500 pesos for us to watch movies, buy clothes or pay the bills. Just make sure that you pay your credit on time or you'll end up losing or just off-setting your profits.

Advantages and Disadvantages of Using Your Credit Card as Capital

Advantages:

• With a Credit Card, you can make money out of nothing
• The only real investment you do here, is you skill with sales and marketing skills
• Sales and Marketing skills improve
• This could be an exercise to improve your cashflow management

Disadvantages:

• It's easy to feel bad when you think that the money you have in your hands actually don't belong to you.
• If you get delayed on payment, expect to pay interest + finance charges on top of your credit.

I hope that in this article, I have somehow shown you that having no money is not an excuse to fund a business. You just learned that your credit card can be used as a source of capital. Be creative, there are other ways to finance your business!