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A recent Capital Access Network Inc. survey of small business found that small business owners are increasingly optimistic about their business outlook and the health of the economy for 2007. In fact, 61% believe it will be a good year in terms of their success.
What was surprising was the finding that while many small business owners will continue to fund their expenditures using credit cards, 50% were unaware of the potential costs associated with financing their businesses with those credit cards. In short, if they made a $5,000 expenditure using their credit card, more than half of the respondents could not tell you the actual long-term costs if only the minium payments was made over a five-year period.
And, for those of you curious about what that long term cost would be here is the information courtesy of data provided by the FDIC. An initial charge of $5,000 with an 18% APR rate can amount to an actual cost of more than $18,000 and would take nearly 46 years to pay off if only the minimum monthly payment was made (assuming that the minimum is two percent of the outstanding balance).
