ICAEW recommends credit cards for small businesses

Small business bank account holders should consider using credit cards in order to pay for their day to day outgoings and purchases, one accountants industry body recently recommended.

The Institute of Chartered Accountants in England and Wales said that, while many see the use of credit cards as a risky and expensive way to borrow, they can be used to great effect by providing flexibility and convenience to small businesses.  Clive Lewis, the head of enterprise for ICAEW, remarked that since so many small businesses have found it quite difficult to secure business loans from High Street lenders as a result of the current economic turmoil, turning to forms of finance such as credit cards has grown in popularity.

Customers have been using credit cards as one of the most often used methods of payment for quite some time, thanks to the convenience they offer to cardholders.  The ICAEW said that businesses can even use a credit card for interest-free borrowing if used within the period of time provided for in the introductory offer on many credit cards.

Using a credit card eliminates the need for cash and can be used not just in person, but also over the phone and the internet as well, which can be important in today’s round-the-clock economy.  Using credit cards to make purchases also offers the buyer protections against items found faulty under the terms of the Consumer Credit Act 1974 for goods between £100 and £30,000 in price.

Start-ups can also benefit from credit card use, added the ICAEW, by allowing them to build a credit record that could allow them to gain access to much needed finance in the future.

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