The Angel in Your Pocket New federal rules are making personal credit a better option for startups.

Despite all the talk of venture capital, angel investors, business loans and the like, the fact is about one-third of startup funding comes from credit cards. Plastic is the most popular source of outside financing to get businesses off the ground.

So it's important for startups to consider the effects of the federal Credit Card Act of 2009, even though the bill did not apply to small-business credit cards. The new regulations on consumer credit will have profound effects on how entrepreneurs finance their startups.

Entrepreneurs have come to rely on the ease of transferring balances between credit cards--and have come to view the fees associated with carrying balances as part of the cost of doing business. But this is an expensive way to finance: Interest rates and fees have historically run annual percentage rates up to over 30 percent. Just do the math: To break even on financing costs of 30 percent annually, your business needs to grow its cash flow or net income at 30 percent annually on a sustainable basis. That's a tall order for most businesses.