New to Real Estate · Cleveland, OH · Member since 2022 · 21 posts · 15 votes
Is it a good idea to have a solid business credit card? I don't have any consumer debt and got rid of all my credit cards a few years ago when I was going all-in for debt payoff. But now that I'm approaching purchasing my first property, I was wondering if this is something people recommend. Thanks!
This is a great question. I understand the philosophy of paying off debt, but not all debt is bad debt. I always want to use the Bank's money instead of my own. For example: If you have $100 to buy something with and you use all that money to pay for it, you have no more money but hopefully a cash flowing property. But you are limited to that one property until you have another $100. But, if you put $20 down and the bank provides you the remaining $80, and the property cash flows, not only do you have your own $80 to continue to buy properties, but you have someone paying that note in the form of a tenant, and you now have more than 1 appreciating asset that pays you every month.
This concept is the same when you use a credit card for business purposes. You are using the bank's money instead of your own. I know this has been a long winded post, but I hope it is helpful. Plus, you need a credit score to get a loan and credit cards help establish that. Good Luck out there!!!
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
4y
@Account Closed I would compare having and using credit cards to be like using or playing with fire. Fire can do a lot of good things, it can cook your food, it can heat your home and your water for bathing, etc. But fire can also burn your food, scald your skin, and it can burn down your house.
As for me, I have many credit cards, both personal and business. But I also have a lot of financial intelligence and self discipline when it comes to managing debt. If you don't manage your debt well, then I would not suggest getting and using credit cards. One of my most viewed videos on my Youtube channel addresses this exact topic of how to use credit cards to help buy real estate. So it is a topic that a lot of people want to know.
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
4y
I have several Personal credit cards.....and maybe 2 business cards.....im very disciplined with the cards and keep my utilization low.....im a big proponent for credit cards and using them as tools