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Crowdfund Investing versus Credit Card Financing

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Can crowdfund investing reduce the necessity of relying on credit cards? Very possibly — if you can plan far enough ahead to anticipate your upcoming expenses and spot future opportunities for growth before they’re in your face and begging for cash. Whereas credit cards are quick fixes that often wreak long-term financial havoc, crowdfund investment campaigns demand longer-term planning and commitment.

[Credit: ©iStockphoto.com/Ravenesting]
Credit: ©iStockphoto.com/Ravenesting

You start your business with your savings, but maybe your budget doesn’t reflect every item you need. Or maybe you have opportunities to invest faster than you had planned. Either way, after your savings is tapped, the easiest source of funds is your credit cards. Unfortunately, credit cards are usually the most expensive form of debt that a business can utilize.

You’ve heard it before, but this advice bears repeating: If you use credit cards to fund your business, pay them off each and every month. If you can’t do so, use them only when absolutely required. Otherwise, when you seek funding from a bank or another resource, your outstanding credit card debt will be a strike against you.


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