Using credit cards to start a business?

andy013

mikael wrote:

Anyway, I think the plan could work in a more moderate fashion. If an application were made for Egg Money in addition to 5 other cards or so with 0% interest then the money could all be balance transferred to Egg and then moved to a high interest account. The money could then be drip fed back to pay the cards off.

This sounds like a more plausible solution. Can you please give me more details on how this would work? What's special about Egg?

Thanks for all the advice so far

M_Thomson

One question that hasn't been asked, if you are a full time student, then how do you plan on getting up to 30 credit cards???!!! There are people who earn lots of money working and have trouble getting more than a couple of cards. This isn't going to happen.

tomstickland

My question: Is this possible? Are there any problems with this idea?

You'll have some sort of credit limit and won't be able to borrow £50K.
Your credit rating will take a pounding, especially if you start to be rejected by the multiple applications, this will snowball into an appalling credit rating.
Have you researched how many business ideas fail?
If you owe £40K on credit cards and have no real income you'll be in a right mess.

If your business idea is sound then I suggest starting small, with minimum outlay and use profits from the business to grow it, so you're in a low risk situation at all times.

M_Thomson

tomstickland wrote:

You'll have some sort of credit limit and won't be able to borrow £50K.
Your credit rating will take a pounding, especially if you start to be rejected by the multiple applications, this will snowball into an appalling credit rating.
Have you researched how many business ideas fail?
If you owe £40K on credit cards and have no real income you'll be in a right mess.

If your business idea is sound then I suggest starting small, with minimum outlay and use profits from the business to grow it, so you're in a low risk situation at all times.

The thing is, how would he get anywhere near £50k just being a student?

bargains83

Credit cards for students usually come with initial limits of between £250 and £1000, certainly nowhere near 5k.

Unless you are planning on lying about your income and employment status, in which case you probably will get a card with a 5k limit or maybe even more. This certainly is NOT advisable behaviour however as although they don't generally 'check with employer' credit card companys can do spot checks on information given and may wish to contact them.

If they do a check like this and it fails, a mark will be placed on your credit file for a fraudulent/deceptive application, this is likely to severely impact your ability to gain credit in the future.

Forget this for a business, if you go ahead with this method of obtaining substantial credit. Think about a future with a chance of not being able to get a mortgage, car loan, credit card (for a sensible reason), business loan etc. Then where will you be?, because thats what you run the risk of doing.

As others have said, If you have a genuine business idea draw up a plan and see a business adviser. There are some free ones around if you look hard enough and will give honest and independent advice.

markmc999

Ok, just my 2cents worth.

As has been said you will REALLY struggle to get enough cards with a high enough limit to get £50k. If you did lie on applications to get these cards (and were caught out by any means) then you could be prosectuted.

May I suggest you have a look at the Princes Trust and Business Link who are BRILLIANT at giving funding out (I know!) also have a word with your local council and see if they have any funding available - again I know they do.

Also, £50k sounds rather high for a business start up, I'd seriously say try and cut costs first before doing anything

Good luck!

gamma

Maybe a quick overview of the business idea would enlighten us all?