I read a thread over at StartupJunkies.org recently. A poster was asked if he should use his seven credit cards to bankroll his business. My answer is a firm “no”. Things have changed dramatically over the last few years making this financing approach simply too dangerous.First, there’s the new Bankruptcy law which came into effect last October. Under this new law, many people who file for bankruptcy will still be forced to pay off all or a good portion of their debts. It all depends on how their pre-filing income compared to the median in their state.
Second, there’s Uni versal Default which means that if you’re late on even a utility payment, it can trigger a cascade of consequences. These being increases in all of your interest rates on credit cards, personal loans, mortgages, and auto payments.
Photo by Travis Hornung.
Business Opportunity on January 7th, 2006 at 9:16 pm
Hello:
Most people believe that to finance a new business with their credit cards is smart.
But they believed that with the assumption that the new business will succeed!
Most people who start a new business never think about failure.
They never realize that thinking about failure is the best way to avoid failure!
That is the reason why most new businesses fail!
They never thought about failure and had no plans in place to avert it.
Financing a new business with a credit card is not smart at all because if the business fails, you’ll owe a lot of debt to the credit card companies.
Ikey Benney, Ceo