I didn’t have much in terms of financial reserves when I first started my business, and it was difficult to find a lender because of my sparse credit history. Ultimately, I ended up using my personal credit cards to pay for my company’s online advertising.

Using credit was a no-brainer for me because my revenue exceeded my marketing costs. I knew the cards would be paid off within the month. But, for businesses with inconsistent revenue, using credit cards can be a risky play. You could end up jeopardizing your personal and business credit scores and paying a lot in interest.

For businesses with a fluctuating sales cycle, depending on a credit card can be a high-risk venture if they don’t plan correctly. Others might be unaware of the benefits of utilizing a card or they might be too intimidated by the potential risk factors. But there are cases in which using a credit card makes sense and can benefit your company.

How To Select A Business Credit Card

I’ve always been scrappy when it comes to using my business credit cards. Carefully selecting a credit agreement with the right attributes can help a business stay financially solvent, and it can even provide some extra perks.

First, make sure to evaluate the interest rates and introductory periods. For example, it can be useful to know whether the card has an introductory period for a zero interest annual percent rate (APR) in addition to its normal interest rate. If you know your business has a short window to get up and running and a credit card is your only funding option, you might want to go with a card that delays high interest charges. This limits your debt to actual expenses while you work to pay down your balance.

It’s also important to watch out for annual fees. Some cards have very low interest rates but might require you to pay an annual fee. Sometimes, though, it can be beneficial to pay the fee in order to get that low rate. The savings of a low monthly APR could very well pay for the annual fee.

Cash-back rewards programs can also be hidden gems for businesses to utilize. We earned a lot of points quickly when we used a rewards card to pay for our operating expenses. That way, when we moved into a commercial office space, we were able to use our points to pay for new furniture.