Use Credit Cards Wisely When Selling on eBay

August 23, 2007

Is it a good idea to use credit cards to pay for inventory when starting an eBay Business?  I had a reader ask this question the other day and I think the answer is, it depends.  Personally, I use a cash back credit card to buy any inventory I sell on eBay but there are some specific rules I follow when using the card.

Only Spend What You Have
If you purchase something on your credit card and sell it before your card payment comes due, you’re leveraging your credit card. You sold something for a profit that never actually cost you any money since you had the cost covered before you received the bill. While this is a great tool to make money, you should be cautious about abusing it. I only spend money on inventory that I know I can cover. What happens if you buy a bunch of stuff on credit you don’t have the money for and can’t sell it before your credit card payment is due? That leads nicely into the next rule.

Pay It Off
If you aren’t going to pay off your card balance each pay period then you shouldn’t use it to buy inventory.  Don’t even think about taking your profits and re-investing it in new inventory until your card balance is paid.   The whole point of selling on eBay is to make money.  If you’re carrying a balance then you’ll be losing money with the high interest charges.

Be Disciplined
You have to use strict guidelines when buying items to resell on eBay to be sure you’ll make money.  I only buy something if I have a good feeling how much I can sell it for and what my costs of selling will be.  One tendency people have when using a credit card is to overspend or make foolish purchases because it doesn’t feel like you’re spending “real money”.  If using a credit card prevents you from being disciplined in your buying you shouldn’t use it.

If used correctly, credit cards are a good tool to use when buying inventory to sell on eBay. The benefits are it earns you cash back, offers a little leverage, and helps keep track of all your purchase records in one place. However, if you can’t follow the suggested rules, I’d recommend not using them.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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2 Responses to Use Credit Cards Wisely When Selling on eBay

  • chris

    This is an excellent article. I sell on ebay also. Here is my situation. I’ve been selling on ebay for over 3 years. I’m able to get my products at my job. I don’t carry inventory at all intil someone purchases an item online. Then I go to work and purchase the item using the buyers money. I swipe the paypal debit card and what is left over after ebay and paypal fees, and shipping is my profit. I range between $15-25 dollars. The only problem is I never see my funds in my paypal account acts as a seesaw. It goes up and down? Would leveragng my inventory on a credit card increase my balance or will the same thing happen?


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