Having a credit card to fund your small business is just like having a double-edged sword. Credit card helps you to start the business faster and gives you easy money, but when you can’t deal with it and your bills aren’t paid well, it will ruin your business and put you into several distresses.

To make you more confident while using credit card to fund your small business and give you the best opportunity to start building a credit history, here are some tips on how to use credit card wisely:

1. Know the types of credit card and choose one to fit in your business needs

Today, credit cards come in many types with different purpose, ranging interest rates, fees and reward programs, so before you fill out an application, it’s important to know which credit card suitable to your financial business situation and lifestyle. You can find out types of credit cards in this article.

You can have a business credit card that suitable for business owners. The benefits are they have a low introductory rates, cash back programs and airline rewards, special business rewards and savings, expense management reports, additional cards for employees and higher credit limits.

Without strong personal credit, it would have been harder to get a business card. Opening a business checking account, is a key first step toward establishing business credit.

2. Remember the positive and negative impacts to maximize your credit card

Use a credit card well means that you can borrow for nothing, get extra protection on your purchases and reward points or cash back. But by using credit card unwisely, you could end up paying lots of interest and racking up a debt you struggle to pay off.

Realizing the pros and cons of your credit card can help you maximize the benefit. You can study the best and the worst aspects of your credit card in this article.

3. Avoid higher interest rate of your credit card, otherwise you cannot pay bill amounts on time

Some credit cards offer 0% periods, meaning you can effectively benefit from an interest-free loan. You need to clear your balance before the 0% offer ends though otherwise you’ll be charged interest.

The average interest rate is 18%, that’s quite high which is why you should pay your debt off before interest kicks in. Not everyone needs an extended interest-free period, but even if you pay your credit card bill in full each month, you’ll still ‘borrow for free’.

4. Always pay full amount of your debt as soon as you receive the bills

If you pay only the minimum amount every month and continue to make charges on the card, the total balance will rise substantially. Remember that 30% of your credit score is determined by how much debt you carry. This means that accruing charges on your card and failing to pay them off is like putting a dent in your credit score every month.

5. Do debt and budget analysis to determine maximum amount of debt you have to pay every month

It is important for you to know your small business budget so you can take advantage of the good while avoiding the bad. Budgeting helps small businesses determine if they have enough money to fund operations, expand and generate income.  Debt used to fund a business, taking on debt analysis will lead you to build a healthy credit history.

6.  Always save the documentation every time you do transactions and bill payments

By having a business credit cards, you have a simplest way in record keeping and separating personal and business finances, you can track your employee spending, reduce time balancing check books, and produce business financial reports. You can’t take everything with you, but you should safely store or electronically scan and save certain essential documents.

Keep your original receipts until you get your monthly statement; shred the receipts if the two match up and keep the statements for seven years if tax-related expenses are documented.

7.  Don’t spend it for your personal needs if you want to use for business

The real disadvantage with using a business card for personal expenses is that it does not have the same protections as a personal card.  By using a business card for all of your charges, you also miss out on some extra protections consumers won. Use the business card for work, and use a separate personal card for everything else.

Credit cards are helpful tools for building good credit of your small business, but no matter how convenient it might seem be sure keep a close watch on your spending to avoid the troubles.