Credit cards often get a bad rap when it comes to finance, whether personal or business but when used responsibly they can actually save you from a lot of heartache.
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One of my clients recently got hacked on Facebook. Someone created a new ads account under her Facebook account and then proceeded to run up a $5,000 ad bill on her account. The good news is, between PayPal her bank, and Facebook, everything will get taken care of and she will get the money back.
The bad news is, that is cash that’s going to be in limbo for at least a week because the account was connected to her debit card and that money is going to come straight out of her bank account.
If you’re not already using credit cards for every purchase you make in your business, now is a really great time to start. Yes, you need to use them responsibly and only spend what you can actually afford to pay off each month. (I learned some pretty hard lessons in my late teens and early 20s) but they offer you more protection and less stress in cases of fraud… and you don’t have to worry about losing cash flow due to some asshat who hacked you.
Credit cards also offer a lot of perks, like cash back, miles, etc. Whether business or personal I use a credit card for everything. The only thing I pay directly from my bank account are the things I can’t charge like my mortgage, anything that charges additional fees to use a credit card that outweighs the rewards I’d earn… or when I pay an invoice to Nicole so she doesn’t have to take such a big payment processing hit.
And I’ll tell you, it’s pretty nice to redeem all those rewards at the end of the year, especially when I have to buy a bajillion Christmas gifts.
If you don’t already have a credit card for your business, check out the Chase Ink card. They give extra points on things like social media advertising and shipping which makes it a great card for product-based businesses. If you do have one, but you’re not really using it. Please start. Especially for any place that has your payment method stored.
Even my Walmart account got hacked once and they spend a few grand on a couch and some other home goods. Granted, I still needed to deal with it to get the charge reversed, but I was never truly out any cash. I’ve also since removed all my saved payment methods in store accounts I don’t really use.
Moral of the story. Always use credit cards and turn on 2-factor authentication whenever possible.