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Credit Card dependency
More small businesses are relying on 'plastic' (credit cards) to finance their businesses. That shouldn't be a big surprise. I feel as if I don't even carry cash any more myself. A recent report by the Small Business Association confirms this. Part of this is the result of lenders encouraging an increase in credit card loans. Yes, we are becoming a credit card nation. I don't need to tell you the dangers of this. Paying high interest rates, accidently failing to pay on time, floating the debt, fraud, etc. And then there are other dangers you can't even imagine or predict. I recently meet an entrepreneur who finances his whole venture with his credit card, hoping that his VCs would pay him back. Guess what happened. He never received his money, went broke.. and his company went under. Lesson of the day. Think twice before relying on plastic....