In its biennial study of Americans’ finances in 2007, the Federal Reserve put the average credit card balance at $7,300. This is in comparison to $2,200 in the Fed’s 2004 study. Furthermore, the average American has up to eight credit cards!

This trend of spending using consumer credit cards provides business owners an opportunity to increase their avenue for revenue by using the concept of future cash flow.

Most consumers have shifted to paying for products by plastic because of various factors. Theft, periodically removing money from their bank accounts or ATMs and carrying change has become a more cumbersome and inefficient process. On the other hand, plastic is easier to carry, easier to use and can be paid for after the billing cycle.

Irrespective of how much the product costs, transactions via credit cards encourage customers to make instant purchases – a factor that gives a fillip to the company’s sales.

For a company to expand its options of payment for the customer and for its own benefit, it must open a merchant account. This facility usually costs around 2% to 4% on every sale made. For every $1 in purchases, you keep $0.96 to $0.98 and give $0.02 to $0.04 to the merchant account provider, as commission. Most merchant card processing companies also provide your business with credit card machines at no extra cost (the price for which is usually incorporated into their service charge) and 24/7 customer service to ensure that your and their business runs smoothly.

The key for any business is to make it easier for customers to buy your product and accepting credit cards as a form of payment does just that. In addition, it can also save you time and money. Once batched, you can receive your funds in your account within a couple of days, saving you time and productivity had you needed to go physically.

Oftentimes, accepting credit cards also helps your business obtain financing, if and when needed – for expansion, working capital, debt reduction (personal or business) and equipment purchases. Banks may not provide you finance for such purposes, but business cash advance companies will usually say "YES" if you have a business that is based on credit card transactions. This is because, business cash advance companies provide funds based on future credit card sales – this is not a loan, but an advance and is returned through daily deductions from your future credit card sales. Therefore, you only pay back the advance when you make additional revenue. These advances are not reported on your credit and will not go against your loan-to-value ratios if you have or anticipate a bank debt facility in the future.

Providing a facility for credit cards as a mode of payment not just improves your business, but also increases cash flow and thus your revenue.