For the new small business person just starting out, putting necessary start-up costs on a credit card can be very tempting. It can also be financially damaging, leading the business owner to have to dig out for a long time to come.

In the event you’re about to open a small business, do things the right way when it comes to your business plans, avoiding placing yourself in a financial hole.

You will want to look at two facets of credit cards – potentially using one for some of your start-up costs, while also looking at accepting credit cards for purchases from your customers.

Among the things to focus on in getting a credit card:

• Avoid running up credit – If needed; apply for a small business loan which normally will present smaller interest rates than a credit card would. This of course is provided that you do not have a bad credit history;
• Pay off sizable credit card debt – In the event you have a lot of credit card debt, be sure to get it paid off. It should not come as a surprise that paying it off as quickly as possible is less expensive over the long haul since you’re not dealing with major interest rates. Among the ways to do this would be paying more than just the minimum each month, starting with paying down the card with the largest interest rate first;
• Check your credit report – Make sure you periodically check in on your credit report to look for any mistakes that could negatively impact your credit along with your interest rate. In the event there are mistakes, be sure to report them to the credit-reporting agency;
• Pay all bills on time – Nothing is worse for your credit record than being late with payments. In the event you are going to be late with a payment for whatever reason, contact the credit card company so they are alerted to the situation. In some cases, they may be willing to work with;
• Shopping around – In the event you will be getting a new credit card, make sure you compare cash advance rates along with your balance transfer options. In some instances, banks will waive a transfer charge, meaning you can switch a present balance to a card with better rates;
• Know the ramifications of failure – If your business does not take off and you are saddled with bills, there is a good chance you will still have to pay off your credit company credit cards. Check with the credit card issuer to see what their terms and rules are should this scenario present itself.

If you have your small business ready to roll and want to accept customer credit cards as a form of payment for purchases, here are some things to remember:

• Credit card payments boost business – It is relatively well-known that those businesses accepting credit card purchases tend to finalize more sales from customers than those that do not. Along with aiding consumers when they are low on cash funds, credit cards can present them with rewards features and programs;
• Determine pros and cons of merchant accounts versus third-party credit option – It is always a good idea to review the advantages and disadvantages of both. If you are an online business, utilizing a third party can lessen costs when it comes to setup charges for one. Saving on setup costs, however, typically means a large charge per transaction;
• Know how to work the hardware – Lastly, make sure you and/or staff have proper training and support when it comes to terminal usage. The majority of merchant service providers will make available employee training workshops and manuals related to terminal usage. As for online third-party vendors, they generally are available on both e-mail and IM.

At the end of the day, credit card services for a small business start-up can be beneficial for both owner and customer.

But like with all things centered on money, know how to properly use the cards so that both owner and consumer are not left staring a massive debts.

Photo credit: ehow.com

Dave Thomas, who discusses subjects such as small business online marketing, writes extensively for San Diego-based Business.com.