Using Credit Card Debt to Invest in a Business

I’m usually debt resistant for all the obvious reasons: Too much ill-managed debt kills your credit score, which costs you in high interest rates and is a sign of poor money management and living beyond one’s means. The perils of that last bit regarding means (a word no modern human uses in earnest) is so drilled into us that only a fool would consciously take on consumer debt, right?

Two years ago I stood at a crossroads.

I had been a full-time freelance writer for a decade, but I’d launched a blog that was getting a lot of attention and inspired a new course for my career. I found myself excited about work in way I had not been in years, and I saw a business opportunity that had enormous potential — financially, creatively, and in my ability to serve others.

But to grow my new ideas and reach my goals, I needed to invest in my business — consultants and Web designers don’t come cheap. I could slave away, bootstrapping my new enterprise as extra money was earned or found. Or…

I could get the money now. To launch those ideas now.

To make changes in my career and life at a rate I wanted, I needed to take on debt. So I did.

On a business credit card, I made charges that equaled about 10 percent of my income, with 0 percent interest for one year (my credit score, for what it’s worth, is 802). When that deal expired, I transferred the balance to another card at 0 percent for 12 months, remarkably with no transfer fee (those deals do exist if you read the fine print).

I haven’t yet earned back my investment, but I don’t question the wisdom of my decision to take on debt to grow my business. Here are four reasons why.

1. Debt raises the stakes. Without financial skin in the game, my idea was just that — a whimsy. With a five-figure investment at hand, this is a quantifiable business deal (albeit with myself). 

2. It holds me accountable. I admit that the debt makes me squirm. I harness that discomfort and recycle it into productivity. Every day when I check my Mint app, the outstanding debt motivates me to get my butt in gear and keep working toward my goals. 

3. Business debt supports my evolving self-perception. Part of my career goals includes moving away from a service-based industry (freelance writing) into a truly entrepreneurial, scalable business. This requires a mental shift in how I see myself. 

To help maintain momentum and stay committed to my self-image as an entrepreneur, I remind myself that most smart, successful entrepreneurs seek startup capital, especially at the beginning: venture capital, angel investors, friends and family loans, a bank note, or crowdfunding.

One 2014 survey of small-business owners by Wells Fargo found that 41 percent took loans or lines of credit to start their businesses and 33 percent received money from friends or family.

4. There is a reason “It takes money to make money” is a maxim. It’s been true for countless other people. I know it can be true for me too. 

Emma blogs at and is host of The Emma Johnson Show, syndicated nationwide on AM. 

This piece was originally published on DailyWorth in January of 2015.

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