When to Consider a 0% APR Credit Card: 10 Reasons, 5 Precautions and a Story

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Why do so many Integrative Health business owners struggle to grow their businesses???

This is a complex question, with a lot of dimensions, and it would be outside of the scope of this article to address all of them.? But there are three key reasons that I’d like to identify here, which Integrative Health Practitioners face (especially at the early stages of their business):

1. Lack of a clear strategy
2. Lack of clarity around finances
3. Shortage of the financial resources needed to grow

In this article, I’ll be presenting a solution for the third point (lack of financial resources) by shedding light on a financial tool that has immense potential for businesses but often remains underutilized - the 0% percent APR credit card.

In full disclosure, I’m not affiliated with any credit card company.? But I do often recommend them as tools for clients when the scenario is appropriate (and as you’ll soon read, my business has also greatly benefited from them).

WARNING: if you struggle with chronic debt or overspending, the content of this video is not a good starting point.? I recommend checking out the work of Bari Tessler (Art of Money) to create a foundation in your relationship with money before stepping into using financing mechanisms like this:

https://baritessler.com/

Navigating the Business Landscape as Integrative Health Practitioners:

Before going into it though, it’s worth mentioning that most Integrative Health Practitioners aren’t taught about business strategy or finances in their healthcare training programs.? There’s typically not enough room in those curricula to help Integrative Health Practitioners feel adequately resourced for starting their businesses.??

So if you at times feel confused, anxious or overwhelmed by the challenges of growing your practice, just know that there’s nothing wrong with you (and you’re not alone)!

Yet, salaried jobs in the Integrative Health field are few and far between (in comparison to conventional healthcare jobs), which compels many Integrative health practitioners to go into business for themselves. With that said, perhaps you’ll agree that it’s vital for Integrative Health Practitioners (those who want to practice on their own terms) to be equipping themselves with business knowledge, support and resources in order to succeed with their private practice.

Why Financing Your Business Matters:

Let's face it; many of us rely on borrowed funds to pursue significant life goals.? Whether it's purchasing a house or investing in education, leveraging credit is common practice (i.e. mortgages, student loans, etc…).? However, when it comes to nurturing our businesses, my observations tell a different story.? Far too often, Integrative Health Business owners hesitate to invest adequately in their business growth, which results in stifled growth and limits their potential for success.

A Personal Journey:

Allow me to share a glimpse into my own entrepreneurial journey.? Back in 2021, navigating my first year in business was challenging.? I had started my freelance bookkeeping business as a way to fund my Somatic Experiencing and Ayurveda Health Counselor training.? But after a few months of going at it without a concrete plan or strategy, I realized I needed guidance.??

With the little startup cash I had, I enrolled in a mastermind program to help me grow my business, which proved instrumental.? But it wasn’t enough to help me grow my revenue to where it needed to be.? I needed help developing my marketing skills and strategy, but my cash flow wasn’t enough to support investing in the help I needed to grow.? It was a classic “chicken before the egg” scenario.? Do I find a way to finance the growth of my business to get the help I need?? Or do I try to do what I can on my own to grow my cash flow to then afford the support I need, which could cost precious time.

I wasn’t big on credit cards or the idea of carrying debt.? But I knew I needed to grow my business.

It was at this point that I discovered the 0 percent APR credit card — a solution that enabled me to invest in marketing and business development support (i.e. education, coaching, and done-for-me services), without accruing interest.? And as I learned more about business strategy, I became emboldened change my attitudes about credit cards and debt.

Get Strategic:

When it comes to financing in any form, it’s vital to have a strategy in place - without a well-laid strategy, financing becomes a fast track to chronic debt.? But for those who are willing to get strategic with their business, a 0% APR credit card can help a? strategy come to fruition.?

I was fortunate that I was learning how to offer strategic business advisory services at the time I got my first card, so I got to be my own first client when it came to laying out my own business’ strategy and financial roadmap.??

The built-in accountability that comes with paying back a credit card company within 12 months (i.e. to avoid paying interest) gave me enough motivation to lay out my strategy and roadmap carefully, and to continuously iterate upon the strategy as I gathered new information, skills and insights.? Without a clear and cohesive strategy, and without tracking my finances against my financial goals on a monthly basis, I would have been lost.? And there’s a decent chance it would have taken longer to pay the card off (which would have meant paying interest).

10 Benefits of Strategically Using a 0% APR Credit Card:

But why should you consider embracing this financial instrument for your business endeavors??

Here are ten reasons to consider (this is not an all encompassing list):

1. Interest-Free Financing: As the name implies, you’ll enjoy a grace period to repay balances without incurring interest charges (typically this is 12 months, but some go up to 18 months or more).? This is what credit card companies call an “introductory period”.

2. Cash Back Rewards: Many credit cards offer cash back incentives for meeting spending thresholds.? American Express has been known to offer $200 cash back.? As of the time of this article, Chase Bank is offering $750 cash back, which almost seems absurd.? They’re literally paying you to use their money without interest for 12 months!?

But credit card companies are now in the business of targeted advertising, so just understand that’s likely a big part of why they’re paying you (and it’s a good idea to read the terms of the contract for this very reason).

3. Flexible Repayments: Aside from meeting your minimum monthly payments, which are typically fairly low (relative to the credit line), you can wait until the end of the introductory period (the period of time when you have 0% APR) to pay off your balance without incurring interest.? I typically recommend having a plan in place to start making monthly payments by month 7 (if not sooner).? The idea is that by the end of the 12 months, you will have grown your revenue, and will have plenty to pay it off within that time frame (if your strategy is executed successfully).?

Sometimes, I’ll wait and make a larger payment in the final month, since I like to hang on to cash in my bank account to enhance my cash flow (just in case) - but that also means that I’m making sure the cash is there when I need it when month 12 rolls around.? It’s also totally valid to just pay the thing off early and not have to watch it any more (which I’ve also done in some cases, when I had plenty of cash on hand).

4. Access to Capital for Growth: This one is obvious, and is the recurring theme in this article.? You’ll gain access to additional funds (i.e. capital) to invest in business development initiatives (i.e. training, coaching/consulting, done-for-you services, equipment, etc…).

5. Cost-Effective Financing: This one is also obvious, but worth emphasizing.? Compared to traditional loans or lines of credit (which can range from 4% to 18% or more), 0% APR credit cards offer a cost-effective, interest-free financing solution (if you’re able to pay it off on time).? Can’t get much more cost effective than 0%!

6. Rapid Decision-Making: Make decisions and execute faster by eliminating lengthy loan approval procedures.? Credit cards can typically be approved within days (sometimes even within the same day!), and some companies will even expedite the mailing of the card or give you a temporary card number (until your card arrives in the mail) if requested.? I was able to meet a short deadline for paying down a balance for training program this way, and it saved me $3,000 to pay the program off in full!

7. Credit Building: I’ve never been a fan of playing the credit score game, but it does have its benefits, and I will use those benefits.? Responsible use of credit cards can contribute to building a positive credit history, which can be meaningful when buying a car or a house (i.e. saving a lot of money through a lower interest rate).?

A good credit score can also mean that next time you pull a 0% APR credit card, you can get a much higher credit line.? For example, my first 0% APR credit card credit line was $6,000.? My second one (which I pulled about a year after my first) was then $25,000!? And that extra credit allowed me to make some important investments for my business.

8. Gain Financial Skills: If you’ve already demonstrated to yourself that you can handle credit card spending responsibly, this may be the next step for you.? I would assert that we learn by doing, and I’ve learned many financial skills that way.? Necessity is the mother of invention (and learning!), so although this tool comes with some risk, it also comes with the opportunity to seek support, learn, grow, and show yourself that you can also handle this tool responsibly and successfully.

9. Gain Confidence: Risk is inherent in running any business.? But when we take small risks, and succeed, it gives a sense of confidence that is vital for succeeding as a small business owner.

10. Even Failure Can Lead to Success: Even if you don’t pay off your entire balance by the end of the introductory period, if you’re getting strategic and holding yourself accountable to your strategy, analyzing what happened (hopefully with other seasoned entrepreneurs), you’ll get to learn some invaluable lessons.? No successful business owner got to where they are without some failures (both big and small).??If you end up taking a few extra months to pay it off, and pay a little interest, just remember that you may still end up paying less than you would have with a line of credit or traditional loan (if it doesn't go too long!)

Granted, this isn’t exactly the most attractive benefit for pulling a 0% APR credit card, and I’m basically contradicting point 9 by naming the possibility of failure - but it’s important to be real!? And there’s a place for taking calculated risks, and learning from failures. Being willing to take risks, fail, learn, and try again are defining features of successful business owners.

Precautions to Consider:

While 0 percent APR credit cards offer many benefits, exercising caution is key.? Here are five precautions to bear in mind:

1. Financial Systems & Routines: This is so key, and I see too many businesses missing the mark on tracking their finances.? You’ll need a system to track your business revenue, expenses and other transactions on a regular basis (I recommend weekly, but at least monthly).? Without understanding how money moves in and out of your business, you’ll be a ship at sea without a rudder!?

Don’t be afraid to seek support to help you put a system in place.? This might become part of your strategic development plan (i.e. to invest in financial infrastructure and guidance).

2. Don’t Go Without A Strategy: To paraphrase Napoleon Bonaparte, no strategy survives the battlefield...but I never go into battle without a strategy.? If you’re going to finance your business with someone else’s money (i.e. your credit card company), don’t risk going into debt without a solid plan that you can stand behind (i.e. a plan you can justify and make a case for with other seasoned business owners).?

You need to have a clear path laid out as to how you will effectively grow your business.? If you share your strategy with other seasoned business owners, a coach or advisor, and it doesn’t hold up to their scrutiny, you likely have more work to do - and although that type of critique never feels good, you may want to thank them (they may be helping you steer away from a debt trap!)

3. Financial Roadmap: Once you have a business strategy that you believe will help your business grow, you’ll want to create a financial projection or forecast (I call these Financial Roadmaps).? You’ll want to regularly track your actual revenue and expenses (which if you’re using Quickbooks or an accounting software, you’ll see on your profit and loss report).? You’ll want to compare your Profit and Loss report against your forecast (on a monthly basis) to see if you’re on track with your goals.?

Additionally, develop a clear repayment strategy into your roadmap to ensure timely settlement of balances.? This is something you’ll want to build into your financial projections.? Your financial support person or business advisor can also help with this, if you’re not sure how to lay this out.

4. Financial Discipline: Maintain a disciplined approach to spending and repayment to avoid falling into debt traps.? Avoid adding operating expenses that are outside of your strategy and forecast, unless you can justify them and make sure they enhance your strategy in some way (i.e. these expenses should be helping you generate a profit).? Check your balances weekly!? Make sure you’re hitting your monthly minimum payments.??

5. Separate Business from Personal: Keep business and personal expenses separate from one another to facilitate accurate financial tracking.? If your business is operating as an LLC or incorporated entity, you’ll need to be doing this anyways.? Mixing personal expenses into your business card could create legal vulnerabilities, and also muddies the waters when it comes to tracking how much your business is actually spending.

How Do I Know if a 0% APR Credit Card is Right for Me?

There are a few signs of readiness that you can look out for to know if you’re business is ready for the growth that financing with a 0% APR credit card can allow for:

1. You’ve already tested your business business idea, which means you have clients paying you for your services at a rate that is at least comparable to the rest of the market for your modality/trade.
2. You are willing to be strategic and disciplined with your approach to your business and finances.
3. You are willing to look at yourself and recognize your gaps in knowledge and skill, and seek support to help fill those gaps.
4. You are willing to tolerate a bit of risk and uncertainty (which innately comes with any financing arrangement) for the sake of executing a strategy that holds up to professional scrutiny.
5. You are willing to develop a back up plan in case your strategy doesn’t go as well as planned.
6. You are fully committed to the success of your business, and are willing to dedicate the time necessary to grow your business over the next year or so.

If you meet these criteria, harnessing the potential of a 0 percent APR credit card can be a game-changer for your business.? A financing mechanism like this opens up a variety of options to fast-forward your growth - here are just a few possibilities:

• hire a business coach
• join a business mastermind or incubator
• enroll in a business training
• hire a fractional marketing manager or online business manager
• hire a virtual assistant
• hire a bookkeeper

As I often say to my clients “you need to spend money to make money”, and in the same breathe I add the caveat that “we need to spend strategically.”? The 0% APR credit card is a financial tool that can accelerate your business’s growth if used correctly.

Conclusion:

As we navigate the intricate landscape of business finance, let's not overlook this potent tool.? I’d encourage you to consider the possibilities that a 0 percent APR credit cards could unlock for your business.? After all is said and done, money really isn’t the bottom line for most Integrative Health Practitioners.? It’s about the impacts we make with our communities and the lives we touch.? But our business is the vehicle that allows us to deliver these vitally needed services, and also support a lifestyle that allows us to offer our best to the world.? I trust you will invest in your vehicle (i.e. business) wisely.

Exercise:

What are 10 ways you could use $10,000 to strategically and effectively grow your business?

Take 10 minutes to write down your answers, and then identify which 3 might be your best bets (and in what order).

Bonus action: Run your 3 best ideas by a business coach or advisor and see what input they have to offer.? Do they agree with all 3?? Would they put them in the same order?

Resources for Further Support:

If you’re not sure where to start, seek professional help to support you in developing your strategy and financial projections.

Our team at Life Stream Business Services provides strategy, coaching, accounting and bookkeeping services for Integrative Health Practices that want to grow.?

We would be happy to help you develop your business strategy and financial forecast to give you the best chances of success. If you’re interested in learning some basics of financial forecasting, check out this tutorial where I show how to create a basic revenue forecast: Projecting Success Tutorial

Here’s our website for more information: www.lifestreambusiness.com

Also, feel free to reach out to me directly if you’d like to book a complimentary coaching call (non-sales, coaching only, no-strings-attached): info(at)lifestreambusiness.com

Additionally, government sponsored programs like SBDC and SCORE often can provide low-cost or no-cost support with business planning and strategy, which is great for early stage businesses. Although they may not have someone on staff with specific industry experience with integrative health businesses, they can at least help lay out the fundamentals of a business strategy.