When using credit cards for startup expenses, what is a recommended action?

Transferring balances to cards with lower interest rates is a savvy strategy when utilizing credit cards for startup expenses. This approach can significantly reduce the overall cost of borrowing. When startup expenses are incurred, managing cash flow effectively becomes crucial, and paying lower interest enables more capital to be dedicated to business growth rather than high-interest debt repayment.

Shifting balances to lower interest cards means that more of the monthly payment goes toward reducing the principal rather than covering interest costs. It facilitates better financial management by minimizing the financial burden, allowing for sustained investment in the business.

Increasing the spending limit on existing cards may provide temporary relief or more available credit but does not address interest costs or improve financial health in the long term. Only paying the minimum monthly payment is often not advisable as it extends the debt repayment period and incurs more interest. Lastly, stopping the use of credit cards altogether may restrict access to necessary funding for startup expenses, which could hinder the business's growth potential.