Why that plastic money matters

When perception management consultant Sudarshan S went into business for himself in the late nineties, he faced the typical problems that any self-employed professional in startup mode undergoes. Balancing fixed monthly outgoings and delayed incoming payments was not an easy task.

There were phases when business was slow, when regular clients deferred assignments looking at the market situation, which meant payments would be pushed even further back.

On the other hand, there was a landlord and utility suppliers (electricity, phones) to be dealt with along with staff payments at the first of each month.  

During such situations, it was his plastic money or credit cards that came to the rescue. “I don’t know how I would have survived the initial tough times without repaying credit card bills by instalments. It would have been impossible to stay afloat otherwise,” he recalls.

However, the story doesn’t end here. While Sudarshan did leverage his plastic money to the maximum, he avoided the mistake that many others do, namely taking it for granted.

As soon as revenues started flowing in, he prioritised card payments and cleared the debt before it snowballed beyond control.

“The mantra with plastic money is use it, dont overuse it.

Plastic money should be a safety net, not become an uncontrollable habit. If you auto pilot reflex is to pull out your card, you are not leveraging it, just spending blindly. Instead of entering a potential danger zone that way, be prudent in card usage and ensure that all is well financially within a short time frame,” he advises. 

According to him, leveraging credit cards is something that entrepreneurs should only do for necessities. “Using cards as the gap funding for a new car for instance, is strictly avoidable. Take a cool cab if you have an important meeting or feel unwell. Do not get into the habit of using cards to create assets or you will have too many liabilities to deal with,” he warns.