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You’ve probably heard the old joke that a weekly budget is just something to help you explain why the money ran out about Tuesday. To small business owners, keeping a lid on costs is no joke. Consequently, small business owners are ever vigilant about cutting corners to make ends meet.
One way to stretch your small business budget is through vendor savings programs. More commonly known as reward and/or discount vendor programs, vendor savings programs are offered by business credit card providers to help small business owners save money on necessary purchases. With them, you get everything from free travel to cash back, helping you to grow your small business more efficiently.

Cash Back

Most of the major credit card companies offer programs that will fit your small business needs. For example, the American Express OPEN Small Business Network offers up to 5 percent cash back that can add up if you consider you might spend $10,000 over the course of a year. Doing so would net you $500 in cold hard cash - not bad for the cost of doing business. What’s more, cash-back bonuses can generally be applied directly to various vendor accounts, allowing you to use your cash-back rewards for such things as paying your phone bill.

Business Debits

MasterCard offers its small business customers a MasterCard Cash Rewards program via its Debit MasterCard BusinessCard. The card provides cash-back offers to support small business debit cardholder activation efforts, while also providing usage-incentives for infrequent card-users. Additionally, they offer creative services targeted to business card users, such as help in developing customized direct mail packages in which they will handle rewards fulfillment and cover postage costs for users. The card also provides targeted discounts at a number of leading business merchandise providers, such as Office Depot, Pennywise.com, The New York Times and IBM.

They also allow Debit MasterCard BusinessCard cardholders to earn one reward point for every $2 in small business debit, signature purchase transactions. Equally important, according to a company statement, is the feature that allows cardholders to combine points earned from Debit MasterCard BusinessCard transactions with purchases made with personal MasterCard debit cards, accelerating your ability to accumulate points. In addition to free air travel on any airline with no blackout dates and built-in extras (e.g. free travel insurance), points can be redeemed for electronics, hotel stays and travel packages, as well as discounts at Home Depot, Office Max and Best Buy, among others.

Outside the Box

If you really want to get creative when it comes to leveraging these types of programs, you might consider using some of the available rewards as employee incentives. Giving free mileage or gift merchandize to staff members to reward their hard work is sure to boost morale, enhance loyalty and garner you some good will, which is sure to come in handy at some point.

Finally, consider the fact that using a business card to save money and earn discounts can also help you manage cash flow and streamline accounting paperwork, which frees up your time so you can concentrate on growing your small business by leaps and bounds. That, small business owners might agree, is the biggest reward.

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Managing Your Credit Debt

Buy now and pay later. It’s become the American way. There’s no doubt that a credit card can be a powerful and useful tool. However, as more and more Americans discover every year, too much of a good thing can lead to big trouble.

According to CardWeb.com, the average American family owes over $8,000 in credit card debt. Remember, this is an average. For every family that’s way below this average, there’s another family that’s way above the average. Where you fall in relation to this average can help you determine exactly how serious a problem your credit card debt really is.

It’s important to recognize that no matter what you do, you’re not going to get out of credit card debt over night. It probably took you several years to accumulate the debt you have now, so it’s understandably going to take you some time to get this debt under control. The good news is that as soon as you start, you’ll begin to see both financial and psychological benefits.

Change your spending habits

The first step in gaining control over your credit card debt is understanding how you use your credit cards. Do you save them for unusual expenses like automobile repairs and medical bills? Or do you routinely find yourself reaching for your credit card to pay for a TV Guide, a bag of Cheese Doodles, and a bottle of shampoo?

If you use your credit cards to pay for simple, everyday items, your debt is sure to creep up. You should make a commitment to reserve your credit cards for significant and/or unexpected expenses.

Stop using all your cards

Once you’ve established smart usage guidelines for your credit cards, you need to apply those guidelines. In other words, stop using your credit cards. This may seem obvious, but it’s the most important step you can take to reduce your credit card debt.

Do you have any cards that are maxed out? Cut them up into little pieces. After all, they’re of no real use to you. They only represent temptation every time you get a few dollars paid down.

Each time you look at your credit card statement, you probably grumble over the fact that a huge portion of your minimum payment was applied to interest, reducing your actual balance by only a small amount. The way to combat this effect is to pay more than the minimum amount. Even if you can only pay $10 extra each month, this is an important step, because every extra dollar you pay is applied to your balance. You’ll be surprised at how quickly your balance begins to drop.

Transfer balances to Lower-interest credit cards

One popular approach is to transfer your high-interest credit card debt to some lower-interest loan - either a home equity loan or a low-interest card. This can save you a lot in interest, but be careful. This strategy requires quite a bit of discipline.

If, for example, you use a home equity loan to pay off your credit cards, the only thing keeping you from running those credit cards back up is your own will power. If you’re careless, you could find yourself in a worse position than you were before - maybe even with your home ownership in jeopardy.
The rise in credit card debt has also given rise to the so-called credit counseling industry. These firms promise to negotiate with your creditors for reduced interest and payments. While some of these firms are better than others, it’s important to note that your creditors are not legally required to negotiate with these firms. Most creditors will negotiate because they know the alternative - bankruptcy.

File for Bankruptcy only as a last resort

Bankruptcy should be used only in the most extreme cases. While having your credit card debt completely erased may seem tempting, bankruptcy has several long-term, negative effects. The most obvious is that your credit is essentially ruined for several years, meaning it will be difficult if not impossible to obtain credit even when you really need it.

This may not seem so bad, since your goal is to get out of credit card debt anyway. However, on a more practical level, bankruptcy means having to live completely on an all-cash basis. If the car breaks down, you either pay cash or don’t get it fixed. When it’s back-to-school time, you either write a check for the kids’ new clothes or send them to class in worn-out items from last year.

Once you get your credit card debt under control, it’s just as important to keep it under control. The popular thinking is that you should never charge more than you can pay off at the end of the month. This is, of course, easier said than done.

A more practical approach is to impose your own limit on each card, regardless of its actual limit. For example, if your card has a limit of $2,000, you may choose to impose your own limit of $850. That way, you’ll always have your credit card debt under control, and you’ll have plenty of cushion in case of emergency.

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While credit card debt is a major distributor to millions of bankruptcies every year, the sad part is that it can be easily avoided. Too often people get themselves into trouble by applying for credit cards without researching what kinds of interest rates and fees are tacked on to the card.

People tend to look solely at what they will be putting on the credit cards themselves. By the time you add up all of your charges along with all of the fees and interest rates, it can be overwhelming to make full payments on time. And that is where credit card debt comes into play.

What do most people do from here? Spend even more and dig them into an even bigger hole to try and get out of. It can be difficult to not run up high charges on your credit card, especially if you have a high limit on the card. However, the biggest factor to getting out of credit card debt is spending less.

Getting out of credit card debt is rather easy if you have some self control. To begin with, it is vital that you cut down on your spending and start spending less than you make. This is not going to completely eliminate your debt all at once, but this will be extremely beneficial to you in the future.

If you have a good credit report, there will be a number of options you have to get out of credit card debt. You can take out a home equity loan, a second mortgage or a personal loan. Once your credit score begins to nosedive, things become much more complicated. It may be to your benefit to call a reputable credit counselor if you do have a poor credit score.

If you do opt to talk with a credit counselor, make sure to meet with them in person. You will get a lot more out of meeting with them in person and can ask many more questions. A credit counselor will be able to help you come up with strategies to help eliminate your credit card debt on your own. Because this is their job, they will have a wide variety of options and strategies that can be used according to your specific situation.

Another feasible option is to transfer all of your credit balance to a card with a lower interest rate. Sometimes interest rates are extremely high on certain cards, but not so much on others. This allows you to cut down the cost of interest and focus more on paying off your charges.

You know yourself better than anyone and you know how you got yourself into this mess. It is vital that you take the time to write out how much you’re making and where your money is going. In doing so, you can plan ahead and cut down on your costs to help reduce your credit card debt as quickly as possible.

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