Harrowing Information Regarding the Relationship Between Small Business Owners and Their Credit Cards

The original credit card came about almost 100 years ago, sometime during the early 1920s.

The early iterations were contrived by oil conglomerates and companies in the hospitality sector, with the sole purpose of circulating the cards amongst regular clients to encourage repeat purchases and more convenient spending. Roughly three decades later, we saw the introduction of universal credit cards that could be utilised in a wide range of commercial settings.

Fast forward another 70 years or so, and credit cards are now ubiquitous and omnipresent in every corner of the globe, particularly in the small business (SME) landscape.

Understanding SMEs and Credit Card Reliance

As specified by the ASIC and a corroborated report published by the SME overseer Scottish Pacific, there is something of a credit card debt wave sweeping over small to medium size businesses in Australia:

  • During an SME survey that featured over 1,200 respondents, canvassers ascertained that more than two-thirds of Australian small business proprietors rely almost entirely on credit cards as their primary source for cash flow support and operational spending.
  • Upwards of 60% state that they prefer the ease of using a credit card over facilitating in-depth cash flow projections or attempting to acquire better loan terms through a financier, which is why roughly 50% of SMEs state that their first instinct when faced with cash flow issues is to open up yet another charge card account.
  • Approximately $32 billion of Australia’s national credit card debt is a direct consequence of account tolls, late penalties, and interest accumulation – a glaring indicator of the dangers associated with frequent balance transfers and failing to maintain fiscal discipline.
  • Even after the ASIC instituted regulations in 2012 to curtail credit providers from pursuing remuneration against their highest-interest clients, the misuse of credit cards has continued to bully the SME arena, which is why the ASIC is set to propose a fresh Banking Code of Conduct in an effort to help elucidate lending practices.

The ASIC’s efforts to enhance the simplicity of credit card agreements and rectify malicious industry customs will go a long way towards helping future borrowers cogitate the risks of abusing charge accounts, but these governmental amendments won’t do much for those that have already amassed extravagant debt. This is precisely where low-interest financiers, such as Max Funding, come into the equation.

Why Should I Work with a Private Sector Financier?

If you’ve come to your wit’s end with regard to snowballing account balances and the arduous process of transferring credit debts to new lenders (only to have to replicate the same toilsome task a few months later), industry experts advise you to inquire with a private sector funding organisation and learn more about their products.

With interest rates that are roughly one-tenth of the APR percentages put forth by leading credit card providers, and repayment tenures that can be prolonged by way of term extensions up to 36 months, you’ll be hard pressed to locate a more advantageous and expedient opportunity to bankroll your company.

Flexible, readily available financing is finally within your grasp, so be sure to coordinate with a critically acclaimed financier before you misguidedly take out another credit card.

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