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Just maxed out personal credit card on business expenses

Discussion in 'General Entrepreneur Discussion' started by LordMadHuntsman, Jan 14, 2019 at 8:10 AM.

  1. LordMadHuntsman
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    LordMadHuntsman New Contributor

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    Hi guys so I'm building app I'm developer myself but I had to spend a few thousand dollars on freelancers using my credit card I'm currently unemployed and living on the money from my last business venture and honestly I'm a bit worried about my spendings. I have the money to payout my credit card ,but they kinda give me some kind of security till the end of the project. So what you guys think should I pay my credit card debt with my own money or should I wait for the launch of the app see how it goes and then pay the credit card debt with the money I made from the app? Also I would like to hear what you guys think about using personal credit card for startup expenses. Thank you!
     
  2. ZCP
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    ZCP Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    How many have you sold?
     
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    Based on the limited information you presented, I don't see justifying app development by maxing out your credit cards while you are unemployed. Unforeseen costs, underestimating how much time it will take, or complete failure are all possible options that will leave you up the creek without a paddle.

    I would get my ducks in a row and pay off the credit cards which will otherwise collect interest. Use your development skills to start freelancing yourself so that you can continue to fund it.
     
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    If the app launch isn't successful, are you going to default on the debt?
    If so, you shouldn't have spent the money.
    If not, then you're going to pay it back anyway, why does the timing matter?
     
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  5. James Klymus
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    James Klymus New Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Credit cards are a slippery slope because it can take 5 minutes to max it out, but if you dont have much income then they can be like wearing a backpack full of lead and trying to run a marathon.

    My 2 cents is that you should get a job that allows you to work on your business nights and weekends, while obviously paying your bills and keeping you out of debt. Its obviously too late to take back the credit card debt because youre stuck with it now, but weather or not the app is a success, hopefully you learned a lesson.
     
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    This may be anti-pattern but.... maybe just get a sh*t temp job for a little bit to pay off the CC and get a little stability then go back to full time on the app

    I’m building an app and web dev business as well and also have a full time W2 job. It’s more than possible
     
  7. LordMadHuntsman
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    Thank you for the answers guys of course I'm not going to default on the debt. As I said I'm full stack developer and before I quit my job I was really well paid so I think it will be the best if I just focus on the app for now spend the money I got left over for marketing then get a job and payoff my debt in a month or two. Oh yeah and I forgot to mention that I don't have any other expenses I live in a house that's paid off no kids no wife just me and my dog I'm pretty sure we will do good with the little bit of cash that I got saved for incidents if we have to. So I'm going all in let's see where it will take me :)
     
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  8. ddzc
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    ddzc Gold Contributor FASTLANE INSIDER Speedway Pass

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    Such a vague question with not much background.

    In general:
    1. No, you shouldn't carry credit card debt. The interest is ridiculous, why would you even be willing to pay interest on a credit card when you have cash in the bank to pay it off?
    2. Quitting a high paying job to struggle and build an app which most likely fail is not the best method when starting a business or testing a new idea. You should be working on the app on the weekends and evenings until it's fully launched in to the marketplace and starts earning you more profit than what your full time job is paying you. The cash from your job will also fuel your spending on quality freelancers and marketing which will bump up your chances of success with your new app
    3. Brings me back to point 2, if you can barely pay off a visa bill for a couple grand, where's the rest of the money going to come for other business expenses (unexpected development costs and marketing). It wont be successful once loaded in to the app store, you need a big budget for marketing. Keep adding it to your credit card? Build more interest...what happens if it flops, now what?

    Hope all goes well, gl.
     

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