Many of us (include yours truly) have used personal credit cards to finance the start up or growth of our business. It's easy, fast, and available. The interest rates may be lower than business credit cards. And, you may have exhausted your business loans or lines of credit. But there are a few dangers in using your personal credit cards to finance your business, instead of using business credit cards or loans.

• You can't deduct the interest. If you mix personal & business expenses on your credit card, you can't deduct the interest because some of the debt is due to personal expenses. If you are carrying a fair amount of debt, this could add up to hundreds of dollars each month.
• You will miss deductions. If you are randomly using personal credit cards for business expenses, you will inevitably forget to enter all those receipts into your bookkeeping system. Which means that you will miss a tax deductions that you deserve to take.
• You will be on "the hook" for what is really the business' debts. If your business needs debt financing, the business (and its assets) should be responsible for paying off that debt, not your personal assets. If you are using personal credit cards then you are obviously personally liable for the loan, even if something happens to the business (you shut it down, for example).
• You can't accurately track the real expenses of the business. When you are analyzing the profits & loss statements of your business and creating your cash flow projections for upcoming months, you need accurate information about your historical expenses. If you have expenses "hiding" inside your personal credit card statements, you will not be able to analyze whether your business is actually making a good profit, or if your business has cash flow problems.

What can you do if you are using personal credit cards?

You may not be able to switch to using business debt immediately, either because your business can't get its own credit cards or loans, or because you are not ready to form a separate entity. If so, consider using only one personal credit card for business expenses, and use it ONLY for business expenses. This practice will ease your tracking & bookkeeping, and may make it possible for you to take all the deductions you deserve.

The Wealth Spa(TM) Minute: Have you used personal credit cards for business expenses? Did you input them into your bookkeeping system? Pick just one of your personal cards to use for business (and only for business) expenses.

Credit Dummies Business Personal Finance

A breakthrough title explaining effective, cost-efficient collection methods

In a down economy, the demand for a successful credit and collection game plan increases. Credit & Collections Kit For Dummies is a comprehensive guide for people involved in collection activities with accounts/clients, helping readers approach the often difficult task of collecting from late/slow paying customers, as well as determining when (and if) to extend credit to questionable ones. It gives readers the expert information and tools designed to ensure that their collection methods are both effective and legal. The book's attached CD includes helpful scripts, forms, letters, templates, and spreadsheets to help readers work efficiently and effectively.

Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file.

From the Author

I've poured in over 35 years of my experience into this book, so I'm really hoping you find it useful and not just as a paperweight!

Setting credit policies, collecting past due balances, recognizing the warning signs of an account going bad, legal actions etc. are all part of this book.

While I've written other books on this topic, the Wiley folks really focused my energy on this one to reach YOU, not the collection attorneys or collection agencies, but You as a credit executive or business owner.

This book should also prove useful to recruits in the collection business, as the concepts of making written and verbal demands for payment, along with forms to use, and handling disputes (real and fake) are all part of the day-to-day environment for you.

Bottom line: Dummies books are not for "dummies"...they are for people who know about the topic, but need to know more....and by "more" I mean practical, day-to-day stuff, not academic material.  The check lists alone are worth more than the price of the book...then add the forms....well, you get the picture! 

Have a great day, and happy collecting!

Steve Harms

Credit Dummies Business Personal Finance Pic

Credit Dummies Business Personal Finance Photo

Credit Dummies Business Personal Finance Image

Credit Dummies Business Personal Finance Pic

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Most helpful customer reviews

4 of 5 people found the following review helpful.
Buy It!!!
By R. Cottone
I run a small business and need guidance setting credit polices and collecting from my customers. I was interested in the "how to do it", not a bunch of legal talk. Well, true to the Dummies reputation, this book delivers exactly what I was looking for: VERY specific suggestions, including the forms with the proper language, to get my credit department off the ground. A few years ago I didn't worry about credit and collections, now...well, it has become a major concern. s are using any excuse not to pay...I have to have everything done "by the book". Buy this book!

3 of 4 people found the following review helpful.
Excellent Resource!
By D. Robertson
I needed a refresher to make sure I'm running my credit department the right way. This book has it all, from credit scoring, making good documents, demanding money in writing and by phone, and even "getting tough" if customers still don't pay. It is easy to understand and follow the directions because the authors have taken the time to lay it all out, including scripts and forms. Good stuff.

2 of 3 people found the following review helpful.
THIS BOOK IS A GREAT TOOL
By Jeffrey Jacobs
I HAVE BEEN A DEBT COLLECTOR FOR OVER FOUR DECADES AND A COLLECTION AGENCT OWNER FOR 41 YEARS.

See all 4 customer reviews...