The Do’s and Don’ts Of Using Credit Cards For Funding


Credit cards is a way to get funding and it’s fairly easy to acquire. When I started my first business, a Hawaii tree service company (, I used credit cards to fund it at the startup stages.

Credit cards are double edged swords and can really hurt you if not used properly. Before you decide to use credit cards for funding, here are the basic do’s and don’ts regarding the use of them.

The first thing to remember: preventing debt is one of the best methods to prepare for a secure financial future. Many individuals risk financial freedom by falling into debt. If used properly, credit cards can offer many advantages, such as securing purchases, building your credit score, and it makes it easier to purchase pricey products without carrying money.

When used improperly, however, credit cards function like a high interest loan rather than a money substitute. Lots of people don’t understand how to properly use bank credit cards. And as debts grow, it becomes increasingly difficult to get out of the financial debt. Low monthly installments, usually only 2 to 3 percent of the total amount, and high interest rates can keep consumers in financial debt for many years.

Here are tips on inappropriate and appropriate methods of credit card uses.

Avoiding Debt: Ways You Should NOT Use a Credit Card

  • Do not charge what you can’t afford. Many make the mistake of charging products which they are not currently able to pay back.
  • Do not use credit cards for food purchases, either for groceries or for eating out.
  • Do not take advances on your paychecks. Taking money advances will result in a higher interest rates on the premium amount, accumulate transaction fees, and on grace periods. Even if the total amount is paid in full at the end of the month, you will still end up paying big on the borrowed money.
  • Do not purchase special services for your credit card. Many creditors offer products, such as bank cards scam protection. These services are typically unnecessary for most customers and are often overpriced.

Preventing Debt: The CORRCT Ways You Should Use a Credit score Card

  • Do create a price range. Rather than depending on boundaries established by the credit bankers, take a proactive role to avoid debts by creating budget plans.
  • Do use credit cards only for emergencies: If it is not feasible to pay for an item or service with cash, you may use your credit cards. But you need to create a plan for paying it down afterwards.
  • Do pay your credit card balance in full each month. This eliminates injured interest costs on the money you used.
  • Do pay on time. When you pay your bill late, the creditors can charge late fees and can raise your interest rate from the standard rate specified in the terms of your credit card agreement. Increases from late fees are sometimes double the standard rate.
  • Do limit the number of credit credit cards you have. Having too many cards makes it more difficult to keep track of transactions and to manage payments. You probably need no more than two cards.
  • Do read the fine print. Credit card agreements contain important terms about your interest rates, late payments, and standard costs. Creditors generate income off of customers that fail to pay on time. Being educated about the terms can help consumers avoid paying fees and high interest rates
  • Do keep a record of purchases. It is important to pay attention to your debts in order to guard against fraud.
  • Do leave your credit score cards at home as much as possible. One of the best ways to stay out of debt is to leave your credit cards at home.

Although, with all that said, there are good debts and bad debts. It all depends on what you use your credit card funds for. But we’ll save that subject for next time. Stay tuned!

Comments are closed !