Credit Cards Though Expensive But Offer Many Benefits

Specially, for the business owners of small and business sized companies in UK as

it fund the daily running of their business, underlining the problems many have in getting bank loans and overdrafts. The demand for credit-card also known as plastic money has been noticed by small and medium-sized businesses. According to the recent report of British Bankers Association over finance showed that 46 per cent of firms with between 50 and 249 employees use plastic-cards to finance their company for small and medium-sized businesses. This is also compared with 43 per cent who use overdrafts and 34 per cent who rely on loans. Some businesses use a combination of both.

Now even more companies are turning toward plastic cards to fund their daily running of business, highlighting the problems many have in getting bank loans and overdrafts. However, while using plastic card is often seen as an expensive and risky way to borrow though they also offer many benefits according to the experts? Giving credit cards to employees allows the owners of businesses to monitor spending and lets them set individual limits.

According to the representatives of the Institute of Chartered Accountants in England, Many early and initial stage businesses use their visa card in order to fund expenses and providing the debt is controlled it is a good way to fund day-to-day outgoings. Generally, business owners who use master-cards enjoy an interest-free period of up to 56 days before they have to settle the bill which indirectly help with the companys cash flow. It also helps to cut administration expanses. Credit card you pay one bill each month with a company, it doesnt matter how many transactions you make. Itemized monthly statements help with administration and accounting as well. Suffering from high dues of your visa card bill; simply apply for 12 month loans and get money to settle it.

By using a credit card can also help the start-ups to build a credit record, which in turn will help them to secure better rates on other forms of finance, such as overdrafts or bank loans. This is because most of the lenders are reluctant to lend to budding businesses if there is no payment history in settling bills. These smart-cards also provide convenience for paying everyday company expenses by phone or over the internet. However, the use of credit-cards has many drawbacks too, not least for those business owners who are not disciplined about spending. If the bill is not settled in full every month, interest charges mount up quickly.

by: John Cena

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