Borrowing from credit card to invest in home-based business?

debbystewart · 08-18-2009, 07:06 AM

Borrowing from your credit card to invest in your online business or home-based business: good idea or bad move?
What do you think?

wendykrick · 08-18-2009, 01:00 PM

From Personal experience, I say don't do it.

In my first business 6 years ago (an MLM) I invested over $1500 in products that were difficult to move and I spent about $1000 a month in buying leads. It was a lesson learned.

Long story short. If I were starting all over again with very little money, I would start with free advertising like free classifieds, blogging, article writing, squidoo etc. and then I would roll the profits back into my business until I could start doing some paid advertising like pay per click.

The only thing worth investing in would be personal development products that would help to teach me the skills that I need or perhaps a proven system to help me be successful. For example 2 years ago I invested in Mike Dillard's Magnetic Sponsoring. Because I wanted to learn how to "attract Prospects" rather than buy leads. It was a great investment.

Make sense? So I would only invest in personal development and do free marketing until I gained the skills to be successful.

I hope this helps.

~Wendy

LA Grouch · 08-18-2009, 03:20 PM

I agree with Wendykrick.

You also have to face reality... If you don't have the money to invest now, are there any guarantees that you will make enough to pay off the CC in a month.

Start adding interest, and that CC loan could become a monster.

Years ago I started doing simple online things such as surveys, GPT's, etc. in order to make some quick cash. It's not really that quick (2 weeks to 2 months), but you don't need to depend on sales to earn. When the money comes in I invest it into advertising and business promotion.

In the meantime, while waiting for my "earned money" to come in, I would work on any free advertising and promotion available. I had/have a couple of free businesses to promote.

This method may take a little longer, but you don't have a "growing" debt hanging over your head.

I have been in online sales and marketing since 2001. I am making a better living than I would out in the Brick and Mortar world. I am not rich, but I am comfortable.

I spend a good portion of my time researching business ventures and Search Engine Optimization development.
In all my years online, I have yet to buy into any business.

There are enough free opportunities out there to meet most expectations.
Spending your money on promotion, and as mentioned above, self development, is a wise business investment.

welsummer · 08-19-2009, 01:40 PM

Borrowing from a credit card to invest in a home business is a risky move indeed. A wise, successful businessman once said to me, only grow your business with your business. In otherwords, when you start out keep your overheads as low as possible and only upgrade them once your business starts turning a profit and you can afford to invest. The same is true for work at home jobs.

Start out only with the amount of capital that you are happy to completely loose. Once you have made a profit from that seed capital you can then start to grow. Spirialling debt is the number one killer to all startups.

FreedomForex · 08-19-2009, 02:53 PM

Good question,

I am guilty, I have used credit cards for many businesses I have started, in fact, most do if they would answer honestly. Even if it is a purchase for inventory, we all know we cannot sell something we don't personally have in a traditional business, unless you are selling the many eBook deals out there, so this is a dilemma for most.

In my opinion, it goes both ways, you can lose your money, or you could make a fortune, so choose wisely is the real issue. I remember back in the day of front loading MLM's, and without naming them all, they would induce you to spend up to $5K in inventory and would use the old charge card strategy that you would be earning enough to pay off your card in just a couple months. Sounded like a good idea, but few ever saw any profits, and were stuck paying off their credit cards over the next 12 years paying the minumum, if they were lucky.

So when deciding on any business, you have to be cautious, and by all means, don't be induced be a hypster to buy a lot of upfront inventory just to reach a higher level of commissions. I think most of us here have knowledge about the buy ins to reach top level excecutive or platimum position in marketing plan. Don't do it, plain and simple, if a plan is workable, you won't need to buy your way in at the top commission level, you will earn your way into this position.

Using a credit card can be the difference between starting a business and not, and if you are in the not category, then nothing will ever change in your life. If you don't take the risk, you will never see the rewards, it is as simple as that. My very first business investment backfired, and yes, I put it on a credit card, but I learned from this mistake and learned to be more selective and cautious on next venture. Most who finally succeed in their own business will have more than a few losses and failures along the way, but don't quit, learn from them and move forward, I am sure glad I did.

Success to all, Mike