Personal credit cards have proven to be a source of financing for start-up firms for all of the following reasons except?
A) credit card debt is not based on the firm's ability to repay, but rather the individual card holder's ability to repay
B) teaser rates afford initial low cost borrowing
C) balance transfer at below-prime rates
D) credit card debt can create problems if the firm doesn't generate cash flows to cover credit card payments once low introductory rates expire

Question

Quizplus · Accepted Answer

Credit card debt creating problems if the firm doesn't generate cash flows to cover payments is a disadvantage, not a reason why credit cards are a source of financing for start-ups.

Personal Credit Cards Have Proven to Be a Source of Financing