Credit Card Financing: Proceed With Caution
One potentially risky way to finance your business is to use your personal credit cards.
The obvious drawback is the high interest rate; if you use thecard for cash advances rather than to buy equipment, the rates areeven higher.
Some entrepreneurs take advantage of low-interest credit cardoffers they receive in the mail, transferring balances from onecard to another as soon as interest rates rise (typically after sixmonths). If you use this strategy, keep a close eye on when therate will increase. Sometimes you can get the bank to extend thelow introductory rate over the phone.
Experts advise using credit card financing as a last resortbecause interest rates are higher than any other type of financing.However, if you are good at juggling payments, your start-up needsare low, and you are confident you'll be able to pay the moneyback fairly quickly, this could be the route to take.
Excerpted from Start Your Own Business: The Only Start-Up GuideYou'll Ever Need
