Credit cards in business

Credit cards in small craft businesses can be problematic without good credit.

Trying to answer the question regarding the struggles of starting out and being in business raised some issues surrounding developing a credit record and using credit and credit cards. Some say credit is useful for the unforeseen and that you need a good credit report to borrow. My view was different to others because having lived as a lifestyle woodworker I made different decisions based on a completely different paradigm than say those in regular employment with a fixed minimum income they can rely on. I think these things are what make me think differently. Borrowed money from relatives and friends is not a good thing and can lead to conflict even though it is the borrowers full intention to pay everything owed back. Borrowing from banks can quickly turn sour if you borrow to invest speculatively on the basis of developing stock. Of course many successful businesses have started that way, but then many times those finding success collapse every year.

People borrow to buy machines and equipment to make their goods. They borrow to buy materials and then they borrow to travel to shows and more. There is no end to justifiable reasons for doing all of these things. The arguments too are all quite justifiable. The issue I raise is that theorists have one view and realists another. Realists usually speak from their personal experience, theorists from possibilities and probabilities as yet unproved.

I recall times in my past when I put great effort into going to shows. I put my final hard earned cash into making product for three months for a single show. I had enough cash for the petrol but none for the hotel that night of the weekend. The heavens opened and the rains came down for three days. No one came. Had I borrowed money I would have been in debt with no way of paying back. I learned from this. Had I had a credit card I might have used the card, I don’t know. That’s not really a question of being self controlled. I was young with a young family. On the way home I stopped in at a state park and sold almost all I had at a good price. They gave me a check. This is very different than picking up a pay cheque. This is just a small example of early starting out.

The reason I am raising the question of credit and credit cards is that we are living in a society that is moving increasingly toward a paperless moneyed society. Whether you have a credit card or not, you must have good credit to be able to manoeuvre financially and to be able to take payments for your goods. Most people do indeed expect to buy your goods using a credit or debit card and less and less cash or cheque. So, that said, I wondered how some of you get around these issues in an ever changing world with online banking.