Let's not beat around the proverbial bush: If you own your own business and you're carrying credit card debt from month to month that you just can't
Let’s not beat around the proverbial bush: If you own your own business and you’re carrying credit card debt from month to month that you just can’t seem to pay off, you’re not only adding financial stress to your life, you’re wasting money.
Business credit cards these days carry an average annual APR of around 15 percent. That can add up quickly, even if your rollover balance each month is just a few thousand dollars. If that describes your situation, it may be time to consider a balance transfer business credit card.
What is a business balance transfer credit card?
A balance transfer business card is essentially the same as any other credit card, but with a low- or 0%-introductory APR on balances transferred from another credit card. Some offer lengthier introductory periods than others, and many offer cash-back rewards, 0% financing on new purchase, and even sign-up bonuses. Keep in mind that you’ll likely pay a balance transfer fee – usually 3% or 5% of the total balance moved – but there are cards that don’t charge this fee, which can be nice, particularly if your balance is large.
When considering all of these options, it’s important to keep your primary business needs in mind to determine which kind of card is best for your situation. For example, if you think it will take you a while to pay off your transferred balance, you may want to go with a card with a longer introductory period. If you think you’ll get your balance paid off quickly, you may want a card that lets you earn the most rewards or has the lowest ongoing variable APR.
Because these cards are usually reserved for business owners with good or excellent credit, their offerings are competitive, so you may find more than one card that offers all of the above.
Is a balance transfer business card right for your business?
If your current business credit card has a high variable APR, you’re carrying a balance you can’t pay off easily, or both, chances are you can save quite a bit of money transferring your balance to a new card. Likewise, if you’re getting to the point that making your monthly minimum payments is challenging, the breathing room a balance transfer card can offer could be helpful.
A balance transfer isn’t for everyone, though. If you’ve fallen behind on your payments because of your debt, you may have already damaged your credit scores to the point that you may not qualify for a new card. Likewise if you’ve maxed out your credit limit. You’ll need a good credit score for all of the cards on this list.
Also, keep in mind that these introductory offers are just that, and any remaining balance at the end of your introductory period will automatically revert to the card’s standard variable APR, so you’ll want to pay it off in the time allotted.
The best balance transfer business credit cards
Here are our picks for some of the best balance transfer business credit cards available today:
Blue Business Plus Credit Card from American Express: Longest introductory 0% APR
You’ll not only get a 0% introductory APR on balance transfers for 15 months, you’ll also pay no interest on purchases for that same period. After that ,your APR will revert to the current 13.24%, 17.24% or 21.24%, based on your creditworthiness and other factors at the time of account opening.
There’s no annual fee for the Blue Business Plus card and you’ll earn 2X points on all purchases up to $50,000 annually and 1X point for every additional dollar spent. On top of that, you can make purchases above your spending limit without prior approval, so large expenses won’t be a hassle, even while you’re paying off your balance transfer.
Keep in mind, though, that the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the card, your payment history, credit record and other factors.
Chase Ink Business Cash: Most cash back rewards
Would you like to get 12 months of 0% APR financing on your balance transfer for 12 months, plus pay nothing on new purchases for that same period all while earning 5% cash back on the things you buy most often? Then you may want to check out the Chase Ink Business Cash card.
Here’s how the cash back works: You’ll earn 5% cash back on the first $25,000 you spend in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. You’ll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year, and 1% cash back on all other purchases you make, with no limit to the amount you can earn.
On top of that, you’ll get $500 bonus cash back after you spend $3,000 on purchases in the first 3 months after account opening.
There’s no annual fee for the Ink Business Cash card, and once your introductory APR ends, your variable APR will be between 15.24%-21.24%, depending on creditworthiness.
Chase Ink Business Unlimited: Best alternative cash back card
Of course, if you don’t spend a lot of money in the categories that earn 5% or even 2% cash back with the Ink Business Cash card, you may want to consider the Chase Ink Business Unlimited card, which lets you earn unlimited 1.5% cash back on every purchase made for your business. It comes with the same introductory 0% APR offer and all the same terms as the Ink Business Cash card.
Capital One Spark Cash Select: Best card for no fees
The Spark Cash Select from Capital One doesn’t come with a 0%- or even low-introductory APR, but if your current credit card has a really high APR it could still be worth transferring your balance to this card.
To start, there are no fees – no balance transfer fee, no annual fee and no foreign transaction fees. You’ll pay a 14.74%, 18.74% or 22.74% APR on the balance you transfer, based on your creditworthiness. But again, if your current APR is higher than that, it could end up saving you money.
On top of no fees, the Spark Cash Select also offer a 0% APR on all purchases for the first 9 months from account opening, so you can focus on paying down your current debt without paying interest on new debt. You’ll also earn unlimited 1.5% cash back on those new purchases and you can redeem at any time with no minimums.
The Spark Cash Select also offer new members a one-time $200 cash bonus when you spend $3,000 within the first 3 months from account opening.
The bottom line
Unlike consumer credit cards, there are only a handful of business credit cards that make transferring existing balances simple and affordable, so you’ll probably find your options limited to only a few other cards not already mentioned here.
If debt is weighing you down, you may want to consider some alternatives to business credit cards that offer longer terms and lower interest rates, such as a business loan or business lines of credit. While business loans aren’t always easy to get, there could be loan options available that you’re currently unaware of.
As with any financial matter, your due diligence is key to finding the best funding solutions for your particular circumstances.
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