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Just maxed out personal credit card on business expenses

Discussion in 'General Entrepreneur Discussion' started by LordMadHuntsman, Jan 14, 2019.

  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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  3. Dark Water
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    Dark Water Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass Summit Attendee

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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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  4. CareCPA
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    CareCPA Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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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?
     
  5. James Klymus
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    James Klymus 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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  6. jakeG
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    jakeG Bronze Contributor I've Read UNSCRIPTED

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    This may be anti-pattern but.... maybe just get a shit 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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  9. Mark Mueller
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    Agree with those that comment to stay/get employed and do this as a side hustle. I did that on an ecommerce business, and worked the day job till I hit $250k in revenue, then left the day job. You are doing great if you own your own home, kudos to you there. The suggestions to bank roll the business venture with the paycheck instead of the Visa are great pieces of advice!
     
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  10. Zcott
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    That doesn't sound like a financially stable situation, and you must be a bit anxious to post this on a forum for advice.

    The way I see it is, either way, you're going to be spending money. So you might as well just clear off your credit card now.

    You said you're a developer. Why not just get a temp job for a month or so to pay it off and add more to your savings? Surely, that would be the best thing to do? Gives yourself a bit more financial security and less stress whilst you're working on your new project.
     
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  11. B. Cole
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    B. Cole In thine hand is power and might. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Gotta admit - I cringed when you said you quit your high paying job, when you’re not in business yet. I don’t know the details of your situation, but it sounds like you may find yourself back to work pretty soon. Hope I’m wrong.

    Without any promise of income in the near future, you should not rack up debt.
     
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  12. MHP368
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    MHP368 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Ive paid...15% of the credit I used for a failed business in 2013. So I think that was foolish but , Im loving the chutzpah.

    You might want to google "how to eat for 3 dollars a day" ramen will get bland soon , rice and beans as well.
     
  13. minivanman
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    minivanman Gold Contributor Speedway Pass

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    .99c Bologna, .99c wieners, crackers, cut up a wiener and add it to your soup, an egg, .99c peanut butter, .99c Butter It's Not (off brand margarine) peanut butter/butter/crackers... you get the idea. Heck, I eat that stuff now. lol You could eat for 2 weeks on $10 eating that stuff. I'd say splurge on some flavored drink to add to your water from the faucet.

    I've heard many people use this example for many different things... you saw the boat and jumped. What you needed to do was wait until the boat is right up on the shore and then step safely inside. But, we live and learn. It's not the end of the world so just make it through another day and try to be better for the next.
     
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  14. Xeon
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    Xeon All Cars Kneel Before Pagani. Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    One of Kevin O' Leary's teachings : Never buy things on credit. Never.
     
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  15. The Abundant Man
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    The Abundant Man Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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  16. Real Deal Denver
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    Real Deal Denver Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    And now for something completely different. (For you Monty Python fans)

    Oh my, how much interest you will pay. How could you ever afford it? There are so many things you could use that money for.

    screeeeeetttchh (record needle skipping)

    Oh grow the fick up. So you might spend two hundo extra on interest this year. Big damn deal.

    Here's a lesson to learn right now - and learn it good. Cash flow is KING. KING! Leverage and borrow whatever you have to - but keep the cash flow coming in and/or well preserved as much as possible. It is the oxygen you need to survive. So many idiots don't get that. Over 50% of business ventures fail because they can't manage cash flow. Got it? OK then - pay the interest. Get the money. The money is the fuel that you need to run on. Remember that feeling when you ran as fast as you could and jumped off the mountain top, hoping that para sail thing would work - and it started to FALL? Oh you didn't do that? Well - this is the same thing - but you won't die - so that makes it better, right? Right.

    Get off the flippin sidewalk. Jump the chasm. Jump in the deep end of the pool. Grow a set.

    IF you believe in yourself then go for it. Full bore pedal to the metal. Don't let anything stop you. You may fail. You may fall on your face. You may get a boo boo. Oh the pain!

    But I guarantee you that you will be a better person for it. And I also suggest using the motivation to push you harder. Yep - get out in that pouring rain.

    I have been busting through brick walls all my life AND falling on my face sometimes in the process. Funny thing is it doesn't worry me nearly as much anymore. Once you take a few punches, you find out who you are deep down inside.

    Oh, I must run now... The ladies are having tea and crumpets, and I don't want to miss THAT... (don't be a pussy)
     
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