What are the drawbacks of using Business Credit Cards for business purchases?
Very few businesses do not use any form of credit. However, if managed carefully, credit can be used as a tool to build your business. Standard forms of financing are standard for many reasons, but the main reason is that they are the most cost effective strategies for building a business. Business credit cards are a viable alternative when used wisely, but the most obvious problem with business credit cards is the high interest rates that card issuers charge. If any other financing option is available to a business, it will most probably be at a lower rate of interest than a credit card. It is also true that while interest rates for purchases made with a credit card are high, rates for cash advances are much higher still. Yet, many companies make excellent use of introductory rates for the allotted time, then switch to a new card with a lower rate than they would have access to if they stayed with the first card. Card issuers are aware of this practice and are often willing to arrange
