The Best Business Credit Card For UK Dropshipping
What are credit cards?
Credit cards are those rectangular plastic or metal cards that allow you to access a line of credit provided by your card issuer.
This means that you can borrow money to pay for goods and services with the promise that you’ll repay the card provider what you owe at a future date.
Often, as long as you pay off your credit card debt within an agreed time period, you will not have to pay any fees. If you pay back your debt over the agreed timeframe, you will then also pay the agreed interest rate to your card supplier.
What Are The Benefits Of Using A Credit Card For Dropshipping?
So why use a credit card instead of paying for everything upfront from your business bank account? Well if you want to level up your dropshipping business, then a credit card makes good business sense.
Some of the key benefits include:
Ability to push back the payments for essential business tools
More effective cash flow management
An effective way to build your business’ credit history
Healthy rewards for using your credit card including cashback and air miles
Clearly there are some strong reasons why a credit card can improve your business health and level up your dropshipping store.
However, it is important that you are responsible with the use of a business credit card. To ensure that you are enjoying the benefits and not losing out, you must employ some financial discipline. You don’t want to get overwhelmed with interest payments and risk your business’ financial health.
The cons of using a credit card
Now that we have covered the clear advantages, let’s consider the drawbacks so you have the full picture before making your decision:
1. Accumulating Debt
With access to a card with a large credit limit, it can be tempting to spend more than you can afford to pay off. If you carry a balance over at the end of the month, this will increase and over time it can accumulate into a large amount.
2. You can overspend
Spending money that does not affect our bank balance can feel like you are not really using your own hard-earned cash. With access to this money you may feel as though you can spend it without limits as you don’t need to pay it off immediately. If you get carried away, you can overspend before you know it and then you are left with the debt to pay off.
Seeing your rewards increase can also encourage overspending. If you overspend to a point where you cannot pay off your debt before the end of the month, this can lead to interest payments being required. Also if you spend over your credit limit, you can also incur overdraft fees. These add up so it’s vital that you remember your credit limit and your balance due date.
3. Fees
Be sure to read the fine print so that you are aware of all the fees you will be liable for. You don’t want to come across any unexpected fees and with preparation and an eye for detail, you should be able to avoid any.
The annual charge is obvious and not cumbersome, it’s more so the fees involved if you don’t pay off your balance etc. Just make sure to stay on top of your balance and you can power on towards your financial goals.
4. Potential for harm to your credit score
Just as there is the benefit that you can improve your credit score, if you do not stay up to date with repayments, this can also work against you. A poor repayment history and accumulating debt will result in a decreased credit score which will then make it more difficult for you to access financial products in the future.
How Do I Use A Dropshipping Credit Card?
We’ve established the benefits of credit cards for ecommerce entrepreneurs. Now you might be asking yourself: How do I actually use a credit card for dropshipping?
Here is a list and explanation of the methods you can put your credit card to good use:
Supplier Costs
Perhaps the most obvious spend for every dropshipper is your cost of goods including any delivery fees. With every order you receive, you will be paying your supplier for the product at your reduced trade price and asking them to arrange the delivery directly to your customer.
A lot of suppliers will be happy to take this payment via credit card. This can be done either via an online payment or over the phone.
Using the recommended ‘home-turf advantage’ dropshipping business model, you will be working with high-ticket products. This means that your supplier costs will easily reach thousands of pounds every month. This is a great reason to use your credit card for all of these payments as you will benefit from the reward points.
Remember this is money you would be spending anyway but by using a credit card, you can benefit from the cashback rewards and you could be flying first class in no time.
Advertising & Marketing
Use your dropshipping credit card to cover your Facebook and Google Ad spend.
Why not squeeze even more value out of your marketing investment and receive cashback with every marketing pound spent?
With dropshipping, the old adage is especially true… speculate to accumulate. To drive traffic to your online store and generate sales you will most likely be using a paid advertising method in the form of either Facebook or Google ads (or both!).
Your dropshipping credit card will come in especially handy again when you connect it to your ad accounts. You can start making sales and therefore profit before you even spend any money on the advertising to drive these sales. Another method to push the cash flow back into your favour.
Ecommerce Platform Membership
Shopify is the most commonly used ecommerce platform for UK dropshippers due to it’s market leading website hosting and payment processing tools. Also, Shopify provides their resources at a very reasonable price considering the potential upside it provides. If you want to get started with Shopify for just £1 a month, click here.
The cost of Shopify is easy to justify as it will provide you with your online store, their payment processor and access to their incredibly helpful support team. Covering this cost with a credit card sweetens the deal so that you can delay payment and enjoy the rewards.
The Best Credit Card For UK Dropshipping
Now we know what credit cards are and what they can do for your business, let’s cover the business credit card that I use.
Capital On Tap Business Credit Card
Capital On Tap is my number one recommendation for dropshippers in the UK to use. It is the credit card I have been with for a while now and it has been revolutionary for my business.
I can control my spending, repayments and rewards all from the app which ties in perfectly with my mobile dropshipping lifestyle. Here are some of the most notable benefits:
Uncapped 1% cashback on all card spending
Redeem points against your balance, for cash, or for discounted gift cards
Upgrade to Business Rewards to earn bonus points and redeem for Avios
Unlimited, free cards for all your VAs for easy spend tracking
Organise all your business spend in one place
Set smart limits to monitor and control their spending
Get real-time notifications at any spend threshold you choose
Simple integration with your favorite accounting software
Simple to use
Unlike other credit cards, this one is fairly streamlined and simple. You don’t have to keep track of tons of different categories and can simply build up points with regular purchases. The app makes it very clear to see your spending and you can redeem your rewards with a click.
Earn Avios Points
At the time of writing, if you sign up for the Business Rewards card, you can redeem your reward points for Avios. This means you can enjoy upgraded flights to destinations across the world.
The best part is that you would have spent that money anyway. Just because you used your Capital On Tap credit card, you get to enjoy the fruits of your labour.
It’s a great way to pull more value from your business.
The Business Rewards Card is £99 a year however if you spend £5000 within the first 3 months, you will receive 10,000 bonus points which equates to £100 if you redeem this points as cashback. Essentially this means that you can enjoy the Business Rewards at no extra charge.
How To Get Your Business Credit Card
Capital On Tap have made the business credit card application very simple. You can apply in under 2 minutes and you will receive a decision instantly.
Simply click the button below to make your application.
What Do I Need To Complete My Business Credit Card Application?
You will need to provide some information about yourself and your business to complete your credit card application. Here are the basics to have ready:
Legal business name (and trading name)
Business address
Your name/DOB/address
Monthly business turnover
Get Starting With Dropshipping Following A Proven Path
If you are serious about starting dropshipping today to achieve your financial and lifestyle goals, there is a program in the UK that is teaching hundreds of people every day how to create their own dropshipping business. It is the exact program that I followed that has enabled me to leave my 9-5 job and make more than £60k in sales every month.
I feel passionately that future online business owners should be given the opportunities that I had to realise their dreams. That’s why I am now a coach within the program to help people find the same success that I have had.
Simply click the button below to register for the Dropship Unlocked training.
