As a business owner, you probably can name your credit cards off the top of your head. However, if you’re like 48% of respondents in a recent CreditCards.com poll, you don’t know their interest rates.
In other words, you’re playing a risky game if you don’t religiously pay off your full balances every month well before due date. Even if you do, you’re likely throwing away free money, redemptions, perks, points and bonuses.
Credit card companies count on your being too busy to bother to check whether your annual percentage rate has changed every time you get a statement. A payment made one day late months ago might have resulted in a cash-eating interest-rate increase. You just don’t realize it because you’ve been working on recruiting, onboarding, selling, scaling and fitting in those precious moments of downtime.
Obviously, the first action you should take is to stop the flow by addressing the biggest credit card mistakes far too many smart entrepreneurs continue to make.
Credit Card Faux Pas
I run a company and manage employees. I also pay attention to the money I bring home. My goal is to make cash go as far as it can, which is why I’m careful about not falling into the top credit card traps.
The first is paying the bill on the day it’s due. As previously mentioned, payment processing isn’t an exact science. Whether your payment comes in two days or 30 days late doesn’t matter — you’ve already jeopardized your APR and, potentially, your credit score. Always pay ahead of the due date.
The next misstep is being attracted to the wrong credit card. Sure, those 50,000 bonus miles on your favorite airline sound amazing. Here’s the catch: If you fly only once in a blue moon, it won’t be worth it. It’s better to find a card that fits your business and personal lifestyle, such as one that offers cash back or miles on a variety of airlines. That way, you have options.
Finally, if you’re ignoring your mail, you’re walking a dangerous path. Sure, you get junk. You also get correspondence from credit card companies that could contain changes that affect your interest or the way you should submit payments. A few minutes perusing a letter you would have thrown away might save hundreds or thousands of dollars.
Credit Card Hacks For The Budding — Or Serial — Entrepreneur
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