This article was originally published in the IDA The Detail Dialogue July 2021 Newsletter

Credit cards aren’t always the best source of debt with high interest rates for carrying balance but when things are tight they can be the lifeline for what you need. Even if you don’t need it, using a credit card can benefit your detailing business. Here are some ways you can utilize credit cards:

Debt
If you’re in dire need of funding you can use a credit card and hold debt. If you don’t have one, applying for a credit card is pretty straightforward. You can hold a balance and pay low minimums but be aware that interest rates can be extremely high.

Introductory Offers
Many credit cards have special offers when you apply and get approved. You can take advantage of these introductory offers that range from limited time 0% interest on select purchases, low balance transfer rates, sign up reward points. These offers can be extremely beneficial if you’re about to make big purchases where you might be able to pay over time or get rewards. Do take into account that some credit cards have an annual fee that may cut into your savings.

Credit Card Rewards
Many credit cards have rewards and you can find the card that fits your business best. For example, some credit cards offer extra rewards if you use them for shipping or maybe purchases on gas. There are a lot of options to choose from to get the most savings from a credit card. Depending on your card you may be able to use the rewards as cash back to pay your bills, use it towards gift cards for places you shop at for your business, or straight cash back money to your bank. Over the course of a year, these kinds of savings can add up quite a bit.

Time to Pay
Since you can hold a balance on your credit card you can strategically use the card to maximize the amount of time you have to pay it. For example, your statement period ends on June 15th and you’re about to buy some polishes on June 12th but you’re not in a rush, you can wait a few days to make the purchase, and then you’ll have more time to pay it off because that purchase will show up on the next statement. You’re strategically extending your payment terms on those polishes.