Today, I just want to share something personal that may give you some ah-ha’s around money.
I don’t have a credit card for my business.
Now, remember, I’m not a financial advisor so I’m not giving you financial advice here, but this is something that’s worked really well for me and I want to explain why.
Prefer to listen? Click below.
Lucky Bitch Video Transcript – Why I Don’t Have a Business Credit Card (And How it Grew My Income Dramatically)
Okay, I do have credit cards for personal use, but I’ve never had one in my business.
There are a couple of reasons why.
Now, in my early days in business, I was using my personal credit card to pay for business expenses. Which is obviously a big no-no and you want to separate that as quickly as you can.
But I realized that I was using that credit card with no real plan on how to pay it back.
Let’s back track a bit.
In my early 20s I got into a lot of debt because I didn’t understand how interest rates worked and I had this instant gratification mentality where I wanted something and I wanted it NOW, even if I didn’t have a plan to pay for it.
If you’re in debt right now, read my article about how to get out of debt because it really is a huge behavior change more than anything else.
My first year of business, I continued that behavior where I was just putting things on my personal credit card willy nilly, and getting into a lot of debt because I was investing in courses, programs and coaches out of FOMO, not from a place of discernment or strategy.
FOMO = the fear of missing out
(and it can get you into debt BIG TIME)
Having discernment in your business spending is about looking at what your gaps are right now:
- what you need in your business
- what skills you need
- what mentorship you need
- what information you need
- what resources you need
AND making decisions based on very strategic thinking, not just, “Oh, everyone else is doing it.” Or “Oh, it looks really shiny.”
Don’t worry. I’m just as susceptible to that as anybody else and I got into a LOT of trouble around it.
After my first year, I separated my business and personal expenses. But the only card I could get for my business was a Visa Debit card. So I could only spend money I actually had in my business account.
But in reality it was awesome.
You might think, “Are there problems with just using a Visa debit card?”
I have a very successful business, but I have cash flow up and downs like any business. I have to say, I’ve rarely come across any problems with using my own money rather than credit.
A few people said, “What about security?”
Go and check with your own bank, but with my card you can still use it as a credit card, which does give you some protection, but you’re just using your own money.
I have found this to be such an amazing discipline and I honestly think it’s helped me grow my business rapidly.
Let me explain why.
There’s been times where I’ve wanted to buy something, like a course and I haven’t had the cash there.
For a minute I thought, “Maybe I should apply for a credit card so I can take the course now and earn the money later” and there’s just been a voice in my head that says,
“No. Just hang on a little bit. Go and hustle for the money first and see what happens.”
It’s changed my business.
Necessity is the mother of invention, right?
I had to get creative. I’ve bundled up products and services that I haven’t thought about, I’ve contacted JV partners or affiliate partners and actually made stuff happen in my business. I learned to create that money out of thin air rather than putting it on a credit card.
Necessity helped me to hustle my butt off and make it happen.
Again, I’m just sharing my personal experience here. I’m not saying YOU have to get rid of your credit card.
Are there downsides to not having a credit card? Sure.
Like when you go to a hotel sometimes they’ll take the whole amount rather than just waiting to the end of your stay. But again, that hasn’t bothered me.
It’s been a really great discipline to only spend the money that I have in my account.
You might be asking, “What about points and all that good stuff?”
I do collect points for my personal credit card that we use for household expenses, and that’s totally cool, but for my business it’s just… yeah, it doesn’t feel worth it.
When I lived on credit, I was ALWAYS in the red. Ups and downs in my cash flow.
Now, I always have money in my account. Coincidence? I don’t know but it’s worked for me to focus on increasing my cash flow rather than juggling negative balances.
It’s been a business decision that’s worked really well for me and I’ve been okay forfeiting the frequent flyer points or whatever.
It’s made me more money in the long run than the points are worth.
I want to hear from you.
Tell me in the comments – has this sparked something for you?
- Do you want to tell me off for not having a credit card?
- Do you think I’m irresponsible?
- Has it changed your mind about using credit in your business?
- Does it scare you?
I’ve actually got a great resource for you – each time I’ve needed to create big chunks of money quickly, like for a tax bill or I wanted to invest in a new website, I’ve used a very specific process.
It’s How to Manifest Money in 24 Hours.
Go to www.LuckyBitch.com/24hours and listen to my free audio about the process that I use every time I need to manifest a LOT of money, whether it’s in 24 hours or within the next few weeks. It really works.
The last message is – I’m super passionate about women being empowered around money.
You don’t have to be in debt. I know it’s a very socially acceptable thing to have debt.
Most people you know probably have multiple credit cards.
Imagine being free from the responsibility and obligation of debt?
When you’re free from debt, it frees up so much creative energy. It allows you to take risks in life and business, doing things on your bucket list or creating big things for you and your family because you’re not tied down by debt.
You don’t have to take on clients or jobs out of obligation because you need the money to pay your debt.
It’s something that I am hugely passionate about and a great start could be not having a credit card. Try it and see if it works for you.
That’s my final message. As always, I just wish you love, luck and abundance in your life and business.
By the way, if getting out of debt is a huge goal for you, I have a great resource. It’s my own personal spreadsheet to track and eliminate your debt.
Did you miss last weeks video? It’s going crazy in the comments. Check it out here: How to Have Awkward Money Conversations with Your Clients