There are two types of unsecured credit cards you can use to fund your small business startup, however, there is only one type that we recommend here at LenCred. The first type of unsecured credit card is a personal credit card. Often times small business startup owners use their personal credit cards to fund their business. This happens for several reasons. The first reason it happens is due to the business owner not having any other options to fund his/her business so they use their personal credit cards (it’s the only funding they have access to). The other reason is because they simply don’t know any better.
Why You Shouldn’t Used Personal Credit Cards to Fund Your Business
A personal credit card is the type of unsecured credit card you shouldn’t use to fund your business because it can negatively impact your personal credit score. Personal credit cards are supposed to be strictly for personal uses. Therefore paying for your business expenses with your personal credit cards isn’t wise. Furthermore, if you max out your personal credit cards by paying your business expenses, you could see your credit score drop significantly. There is a better way to pay for your business expenses using unsecured credit cards, and that is using the second type of unsecured credit cards– unsecured business lines of credit.
Fund Your Business With Unsecured Business Lines of Credit Instead
Unsecured business lines of credit are unsecured credit cards that were specifically created to fund business expenses. The major difference between unsecured business lines of credit and personal credit cards is that you are separating your business credit from your personal credit. Most of the time your unsecured business line of credit usage will not be reported on your personal credit report, therefore protecting your credit score. This is what separates your personal credit from your business credit.
Learn More About the Difference the Two Types of Unsecured Credit Cards
Our consultants here at LenCred are experts on both types of unsecured credit cards (i.e. personal credit cards and unsecured business lines of credit). If you have been using your personal credit cards to fund your business, our consultants may be able to help you obtain unsecured business lines of credit and get the balances on your personal credit cards transferred over to the unsecured business lines of credit so you can protect your personal credit score. If you’re interested in learning more, please contact us today to get started.