Wondering How Much Construction Companies Pay in Credit Card Interest Each Year? Spoiler Alert - It’s a Scary High Amount!
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Most small businesses, including construction companies, would have a hard time functioning without using some sort of credit card.
But have you looked into how much interest you’re paying each year to use your card? If you haven’t, you might be surprised at what you find.
Read on to find out the amounts that most small businesses are racking up in interest and an alternative that’s available for construction companies.
Credit Card Interest by the Numbers
Credit cards are big business. In 2018, U.S. consumers paid $104 billion in credit card interest and fees, and those numbers continue to rise.
Sure, it would be great if you didn’t have to rack up charges on your credit card to run your business. But that just isn’t realistic.
A survey by Goldman Sachs revealed that 44% of small businesses in the United States have less than three months of cash reserves available.
Most small businesses turn to credit cards so they don’t deplete their reserves, allowing them to keep day-to-day operations running smoothly. This is especially true in the construction industry when payments are often floated or not made until a job is completed, leaving the company scrambling to pay for labor and supplies.
The problem with this model is that most traditional credit card companies use the owner’s credit score to determine lending amounts and rates, and that can add up to a large amount of interest and fees over time.
The Federal Reserve’s Survey of Consumer Finances revealed that 40% of credit card users carry debt from month to month. Every month that balances aren’t paid in full, the interest on the cards accrues, which adds up over time.
A 2020 American Household Credit Card Debt Study showed that people who operate small businesses tend to have higher credit card debt than those who work for others.
These self-employed Americans tend to have average yearly interest costs of $1,539.
As a construction company owner, numbers like this can put a dent in your profits.
And this is just the average. There are many construction companies that pay $5,000, $10,000, even $20,000+ per year in yearly credit card interest.
Flexbase Offers Construction Companies Credit Cards That Can Help
If you run a construction company and are watching your accrued interest grow from month to month, you should put a plan in place to get out from under that as soon as possible.
Obviously, paying off your credit card debt is the ultimate goal. But in these tough times, you may not be able to do that as quickly as you want while keeping your business afloat.
So why not start using a better credit card?
Flexbase is more than just a credit card, and it was built specifically for construction businesses.
With …
- No security deposit
- Credit limits based on your future invoices; and
- Cash rewards that take seconds to earn
… Flexbase will have your construction business doing more than surviving — it will be thriving.
Stop paying high interest rates on traditional small business credit cards and start using a comprehensive cash flow solution.
