12 Jul 2019, 09:30 — 4 min read
Using credit cards for your business can bring a lot of advantages, but it also comes with a significant amount of risk if you fail to use it with discipline. Credit card is one of the beneficial financial tools that can help increase your purchasing power. However, failure to use this tool cautiously can eventually become a burden.
So how can you maximize your credit card to finance your business? The following are the ways to use your credit card wisely:
1. Understand the advantages and disadvantages
Before using your credit card for your business, you have to understand the benefits and the risks – from the perks, rewards, discounts up to the interest charge when you fail to pay on time. As a responsible borrower, you should learn the ins and outs of utilizing credit card to finance your business. It’s also important that you pick the right card for you. If you’re a frequent traveler, then pick a card that can help you accumulate airline miles. For example, UnionBank GetGo card allows you to earn GetGo points every time you use your card. For every PHP30 you use, you get to earn 1 GetGo point. GetGo is a lifestyle rewards program of Cebu Pacific that allows you to accumulate points on your everyday spending (groceries, utilities, gasoline, etc.) and redeem those points for a free flight.
2. Pay on time
You should never forget the golden rule: don’t spend more than what you can afford. Failing to pay your debt on time and in full can affect your credit score, which can harm your business in a long run. It’s always best to pay your dues ahead of the deadline. You can add your credit card due date to your calendar so you will never miss a deadline. You can also utilize your online account to monitor your spending.
3. Separate your personal and business expenses
It’s a best practice to keep your business and personal expenses separated. This will save you time from tracking your expenses. You should use different card for your personal and business spending so that you can manage your finances well.
If you do not have a business credit card yet, start applying for one to start establishing your business credit history that can help you when you apply for loans in the future. Business credit card also comes with a lot of business perks, rewards, and bonuses.
4. Never dwell on your emotion
Your emotion can affect your spending decisions. Before purchasing, you have to ask yourself if your business really needs it. Align your spending to your business goals and make sure that all your purchases will help your business grow. Dwelling on your emotion can lead to overspending which can be a starting point for you to fail paying your debt on time.
5. Maximize the reward programs, discounts, and perks
Make the most out of the rewards program of your credit card. Keep an eye to promos and discounts where you can redeem or utilize your rewards points. For your operations or regular purchases, use your credit card that offers travel miles, cashback, and other rewards. Banks also offer welcome gift when you apply for their credit card on a certain period.
For example, UnionBank is offering a P2,000 eGift at Under Armour when you apply and get a UnionBank CashBack Mastercard (Gold or Platinum) until August 31, 2019. This is open to new-to-bank approved applications only.
Managing your credit card wisely can provide a lot of benefits. Just ensure to follow these ways so you can fully utilize the advantages of your credit card to grow your business.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
Posted byUnionBank Publication
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