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Credit Mistakes That Could Harm Your Small Business

Written by:

Christie Petersen

Edited by:

Kristin Marino

Updated on June 15, 2023

business credit card application Now that you’ve started your own business, or are currently in the works of opening one, looking over your company finances might be something you’re accustomed to. For some business owners the most important financial factors are that you’re making enough to keep your doors open, employees paid, and personal finances in control.

Some business owners fail to realize that if you’re using credit cards to help alleviate business costs, certain mistakes could be harmful to your business.

Using one card seems like the best idea, but are you using the right card? There are many small business credit cards available, do your research before you apply. Maybe you went with a current lender because you already had a credit card with them, or perhaps you were enticed by a commercial for a small business card, but did you look at the positives and negatives? In some cases using a personal credit card might even be a better choice than a small business card.

While you’re researching cards be sure to look for any benefits and rewards that might come with the card. Some cards may use a point system for rewards like gift cards, flier miles, or even cash. Rewards are great, but if the interest rate is too high and the card just doesn’t seem like the right choice then skip it.

If you’re using more than one card consider breaking the cards up into categories. For example, one card may be for business related bills such as electricity, water, or internet services. Another card may only be used for emergency purchases. Using different cards can help your organize your spending and potentially help your credit as long as you are keeping up with your payments.

Whether you own a small business or not, checking your credit report is always important. Getting your credit in good standing can help you if you need to find a credit card with a lower interest rate, need a small business loan, or are in need of a start-up business loan. Checking your credit report may also help against fraud and identity theft. Don’t stop your small business from reaching its potential because of your bad credit.

The Takeaway

Small business owners might realize that using a credit card for your business comes with the same consequences as using one personally. According to a study from the Ewing Marion Kauffman Foundation every $1,000 in credit card debt a small business takes on, its chances of long-term survival drop by more than 2 percent. Find and use your credit cards wisely. AmONE can help you with your business needs whether it is a small business loan, or checking your credit report. Contact AmONE’s educated Money Coaches today to see what options might be right for you and your small business.

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Advertiser Disclosure*. The financial products and services on this site are from advertisers from which AmONE receives compensation. Compensation may be based upon whether you click on certain links on this site or buy products or services from those advertisers. We do not receive compensation from consumers. The placement of advertisements on this site are based in part upon the compensation AmONE has or expects to receive from those advertisers. Placement of advertisements does not reflect our recommendation of any advertisers' products or services. Please consult a financial services professional before making any financial decisions. Our advertisers do not include all the financial products and service providers available in the marketplace.

Loan availability, rates, APRs (Annual Percentage Rate), and other terms vary by advertiser and borrower attributes, including borrower location. Lenders have a range of available APRs; only borrowers with excellent credit will qualify for the lower rates. As of 01/11/2024, our advertisers were offering loans to some consumers for as little as a 6.40% APR on a three-year $100,000 loan.

We do not provide financial products or services. Rather, AmONE provides administrative and marketplace services by attempting to connect consumers with service providers offering products and services such as debt settlement and personal loans. We do not take applications or make credit decisions. We may not be able to match you with any of our advertisers. Credit and other decisions and terms are determined by our advertisers based upon the consumer's submission of an application to the advertiser, which may obtain other information about the consumer from third parties. Approval for financial products and services by an advertiser is not guaranteed.

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