One of the easiest ways to get into credit card debt is if you can get into significant debt within your business and use your credit card to try and offset any loss. It’s surprisingly easy to get into debt within your business, and even easier to get into credit card debt when plugging holes within your business using credit cards.
When starting a business, the main thing you want to ensure is that you stay in the black month after month. How achievable, realistic or consistent that will be is entirely dependent on the business itself. There is no “how to” guide for running a business that will provide 100% success rates with a product or service. At times, life gets in the way of business, and business gets in the way of life.
But, while you are struggling to get into the black as a new business owner, it may be easy to get into credit card debt while you try to either invest into your own business, or use the card as a way to try and fix previous mistakes within the business itself. This is a common occurrence for new businesses, and even more established businesses could use this same process to increase their own business.
I knew a business owner to had created their own business but had made a few mistakes within their running of the business. These were easy mistakes, such as biting off more than they could chew. This is a very common practice for new business owners. He owed debt to suppliers and distributers, but the largest debt was on several credit cards that he had taken out.
Luckily, he was able to use some of his assets to settle his credit card debt. He sold multiple assets to fund his debts. Sometimes negotiation goes a long way.