How to Leverage Credit Cards to Grow Online Selling Business

Before I start, I just want to make it clear that this is a personal strategy that I use for myself given my own financial circumstances. I’m sharing this with you to give you an idea of how I leverage credit cards to grow my online selling business.

Please take this post with a grain of salt and do your own due diligence before making any financial moves such as using your credit cards.

A Brief Background on my Credit Cards

My primary card is Citibank’s Citi Premier Miles Credit Card which I have been using for more than 10 years now. And my secondary cards are BPI Amore Visa Card and RCBC Visa Platinum Credit Card (which I already have cancelled).

I only use my credit cards for purchases that I know I can pay in full when the due date comes. I don’t incur interest in making sure that I pay in full and I pay on time.

The best part is, I also earn miles that can be redeemed for a variety of rewards by using my credit card.

Since my BPI Amore Visa Card does not earn miles, I use my Citibank credit card for almost all of my purchases.

If you have been reading my past posts, you know that my main gig is selling thrifted clothes, bags and shoes, and other accessories online. Most of my inventories come from thrift shops. As of the time of writing, all thrift shops that I have been to only accept cash payments.

So that means, that all of my inventories were paid in cash. However, due to the changing online selling business landscape and the advent of technology, I have discovered a few ways on how to leverage credit cards to grow my online selling business. Here’s how:

I Buy Inventories and Supplies on Shopee using my Credit Card

I’m a relatively new user of Shopee and I can say that I love this app. Just to make this clear, this is not a sponsored post nor an advertorial for Shopee. I really use this app for both my personal and business purchases because of the following reasons:

Increasing Number of Thrift Sellers in Shopee

I have noticed a steady increase of thrift sellers in Shopee as days go by. Although most of the items being sold are at the same cost as my selling price, I still find items every now and then that I can still flip (buy and sell for profit). I still prefer buying from thrift shops so I could personally inspect items before I buy them but I’m still keeping my options open when it comes to buying inventories from Shopee sellers.

Discount Vouchers and Free Shipping Options

One of the reasons for Shopee’s huge success in the Philippines is its discount vouchers and free shipping options. In my first few purchases, I didn’t know about this and just paid for everything. However, after a few purchases, I’ve learned how to earn and use discount vouchers and coupons to generate savings from my purchases. Money saved is money earned, right?

Since I live outside Metro Manila, I don’t get to take full advantage of the Free Shipping Options which actually has a capped (usually at P60). Shipping to my town is a bit expensive probably because of its location. But nevertheless, I still get to save some money on shipping.

Option to Use Credit Cards for Payment

I often use Shopee Pay to pay for my Shopee purchases. But in times when I’m short with cash and I see a very good item to flip, then I use my credit card. As of the time of writing though, paying via Shopee Pay is still the best option when buying something from Shopee since it enables you to take advantage of the discount vouchers.

Buying Directly from the Sources

For some of my supplies such as leather paints, etc, I find it cheaper to buy from Shopee instead of going directly to Marikina to buy them. I know the cost is not the same but it’s not that expensive and I get to same time and money (transportation cost) by buying from Shopee.

 

Shipping Items via Lalamove using my Credit Card

My main shipping option is JRS and LBC, however, for bulky and breakable items, I prefer shipping using Lalamove. I use to pay Lalamove with cash. However, as time goes by, especially when I’m short on cash, I have learned to use my credit card to pay for Lalamove.

To use your credit card to pay for Lalamove, you have to Top-up or Reload your Lalamove wallet. This option can be easily seen on Lalamove’s main menu options. There are only three options as of the time of writing – P300, P1000, and P5000. Since I don’t have that much Lalamove shipping nowadays due to the pandemic situation, I only reload P300 every now and then.

Buy Supplies on Physical Shops Using my Credit Card

This is something that I don’t do often since most of the items I need can be bought online. However, for some items that I don’t see available online, I go to the physical shops and buy these items using my credit card.

Why I Leverage Credit Cards for My Business-Related Expenses

Most of the time, especially in the past, I always use cash. However, in recent times, I find myself using my credit cards more and more. And here are the reasons why:

Credit Card Float

With my Citi Premier Miles Card, I get to have 46 – 47 days of credit card float (maximum) if I charge my purchases the day after my cutoff date. For those who are not familiar, this is the number of days between the date of purchases and the due date.

To maximize this, I always charge my purchases right after the previous cut-off.

Earn Miles and/or Rewards Points

Depending on your card rewards program type, you can either earn miles or rewards points when you use your credit card. Since Citi Premier Miles is a travel credit card, I earn miles for my purchases which I can then transfer to their partner frequent flyer programs.

 

Keep Hold of My Cash for a Bit Longer

When I use my credit card, I don’t have to pay my purchases right away unlike cash. I will have to pay for it when the due date comes. So that means, I get to hold my cash for a bit longer and take advantage of other earning opportunities. I usually keep my cash on my CIMB Upsave Account because of it’s high-interest rate compared to other banks.

I also use my cash as my ‘opportunity money.’ This means cash reserves for purchases that I could flip (buy and sell for profit). There are rare opportunities online when a very expensive item is being sold very cheaply by the seller for reasons I don’t sometimes understand. And this rare opportunity is usually cash transactions.

Almost Free to Use

If you get to avail of credit cards with no annual fee and if you pay your credit cards in full and on time, then it’s a free financial tool for you. My Citi Premier Miles card does not always waive the annual fee but I’m lucky that this year, they waived the annual fee for me. I got my BPI Amore Visa Card under their free annual fee for life promo so that means, I don’t get to pay any annual fees at all (subject to change of course).

So before you get a credit card, be sure to check if there are credit cards with a free annual fee for life promotions available in your country. Money saved is money earned, right?

 

When Not to Use Your Credit Card

A credit card is a powerful tool. It can either help you or break you if you’re not careful. So I suggest only use it only if:

You Can Pay Your Purchases in Full and On-Time

I suggest that you only use your credit cards if you can pay them in full and on time to avoid unnecessary charges such as interest, late charges, and some other applicable fees.

You Have a Steady Income

If you don’t have a steady income, I don’t suggest using your credit cards as it could possibly bring you unnecessary issues if unpaid on time. If you’re in the process of growing your business and if you’re cash-strapped, I suggest that you look for alternative sources of cash for purchasing your inventories and supplies without incurring credit card debt.

You may try exploring alternatives to generate money to grow your business such as:

• Get a full-time job that will still enable you to run your business on the side
• Get a part-time job that could give you more time to grow your business while earning some money from your job
• Interest-free Loans from Family Members and Friends

You Have a Strong Self-Discipline

Some people that I know still get into huge credit card debts even if they have steady sources of income because they treated their credit cards as cash cows. They bought a lot of unnecessary stuff and they’re often behind their due dates.

A credit card is not free cash my friends.  You still have to pay for your purchases on your due dates and it will incur charges and other applicable fees if left unpaid.

If you know yourself and if you feel like you are not yet in control of your urges to buy this and that, then don’t use your credit cards to grow your online business.

Don’t even use it yet for personal purchases. Or better, don’t get a credit card yet until you know that you have built strong self-discipline when it comes to handling your finances.

 

Final Thoughts

For those who know how to use credit cards properly, credit cards are such amazing tools. You can gain both personal and business benefits if you use credit cards accordingly.

I have made mistakes in using my credit cards when I was younger and fortunately, I have learned my lesson and I know how to make the most of it.

I hope that you learned a thing or two from this personal strategy that I have shared on my blog. Again, please take note that this is a personal strategy that I have decided to do based on my current circumstances and this may or may not also apply to your situation.

Please do your own due diligence before making any financial moves such as using your credit cards.

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