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People use CREDIT CARDS to fund companies??? The U.S. of A is a strange, strange country. Anywhere else, this would be both impossible and something no sane p
by brazzy 17y ago
People use CREDIT CARDS to fund companies???
The U.S. of A is a strange, strange country.
Anywhere else, this would be both impossible and something no sane person would even consider.
- jacquesm 17y agoWhen I started a company in Canada I did not have a bank presence there, had to hire about 10 people in the first 60 days, rent an office, furnish it get a house and so on. I took a credit card with me that was backed by a dutch account, went to 'Royal Bank' and asked to open an account. They asked how much I was going to fund the account with and produced the card. No credit score, nothing. They asked, ok, how much. A six figure credit card advance later my account was open and we got bounced up several floors to a personal account maanger. That's one way in which you could use a credit card to fund a business, but the credit line on the card was secured by an account abroad, so it wasn't borrowed money like in the example above. Funny look on the face of the clerk :)
- cperciva 17y agoDidn't you lose several thousand dollars on the exchange rate when you pulled money across via your credit card? I know when I use my Canadian credit card abroad, Mastercard converts at a rate 1-2% worse than what I can get elsewhere.
- jacquesm 17y agoYes there was some cost involved, but because we knew exactly what we were going to do the account in nl was already in $CAN. We also had a US dollar account because most of our income was from the US (24x7 advertising). I think the total on about 90K Canadian dollars spent came to a few hundred bucks, not exactly free, but compared to what the wire costs, delays and so on would have been I figure the time saved more than made up for that.
- cperciva 17y agothe account in nl was already in $CAN Aha, that solves that problem. I didn't realize that you could get CAD bank accounts and credit cards outside of Canada.
- jacquesm 17y agoThe banking system here allows you to open accounts in many different currencies, my bank (RaboBank) offers quite a variety of foreign currency accounts, but so do most other big banks here, though there are not many of those. In nl, currently you basically have a choice between 5 major banks but only three of those are internationally active (Rabo, ABN-Amro and ING). I'm always pretty wary of using foreign currency accounts though, my costs are in Euros and if I take a risk on the exchange rate then that can hurt pretty badly. All my income is - unfortunately - in USD, the current exchange rates are low enough that I lose sleep over it. The last 10 years have not been kind to the American dollar, to put it mildly.
- brazzy 17y agoMost banks actually offer accounts in a broad range of currencies to attract the real money, which is asset management of middle-sized fortunes, usually including some international diversification.
- nostrademons 17y agoIt's actually a lot better than using credit cards to fund consumer purchases... With a startup, there is at least a small chance that you'll make back your money. With an IPod, and blu-ray DVD, and the latest clothes, and various other consumer knick-knacks, it's basically guaranteed that money is down the drain.