Business credit cards are an important way of gaining credit that most business owners ignore. Most credit cards allow for up to 56 days interest free credit provided the outstanding balance is settled in full. There is absolutely nothing to stop you using this facility for your business although you will need to keep a careful track of the relevant records.

The essential point is that you must research what is available. In other words, it is mandatory in business to establish how much credit you can obtain and how long you will be given to pay. You cannot, for example, draw up any meaningful cash flow forecasts unless you assume from the outset that no credit will be available.

It can take time to get business credit cards. In most cases the bank will require some form of reference. All banks have different philosophies when it comes to giving a business credit card and you will need to check the exact position from your bank. Having gained agreement to a credit account it is extremely important that you do not abuse that facility. It can be easily withdrawn as it was granted and this could place severe pressure on your cash flow. Always adhere to the agreed terms of the credit and make payment promptly when it is required.

Failure to pay on time could also render you liable to penalties. Remember that the provisions of the Late Payment of Commercial Debt Act will also apply to debts that you owe. Bearing in mind the substantial statutory interest rate, the charges involved could represent a substantial amount and it is therefore something that you should avoid at all cost. If, of course, your creditors start to charge you on this basis it is also likely that they will have already withdrawn your credit facility.