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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: kate_sept2004/Getty Images April 25, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Erica Sandberg is a credit and money management expert who began her career at Consumer Credit Counseling Service (CCCS). There, she helped individuals and families overcome their debt issues and developed budgets, then transitioned into the agency’s primary media spokesperson. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo The Bankrate promise
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There are plenty of . Let’s say you have the , which comes with a 0 percent intro APR on purchases for 12 months and a regular variable APR of 16.24 percent to 22.24 percent thereafter. And, let’s say you owe $8,000 when the introductory rate expires. Using a , you’ll know how much the debt will cost you under certain payment scenarios (assuming an 18 percent APR): Time frame Monthly payments Total interest paid 12 months $733 $801 6 months $1,404 $425 3 months $2,747 $241 I didn’t give a scenario where you would pay the balance off over more than one year because in normal circumstances (when interest is applied), credit card debt is not meant to be long-term. If you want to finance something for more than a year, a loan is usually the more appropriate choice. Avoid using the credit card as you are paying the balance off. You won’t get the 0 percent APR on any new purchases, so the regular APR will be applied to anything you buy. Do pick up the phone, though, and . Negotiate! The worst that can happen is they deny your request. The best is you pay less in fees. 2 Transfer the balance to a new 0% APR card
The other option is to use a business credit card balance transfer. This method can buy you more time, though there is an upfront fee–generally 3 percent to 5 percent of the transferred amount. You also have to approach this realistically and strategically. Most issuers require applicants to have credit scores that are at least 670, too. However, by opening another and shifting the remaining outstanding balance to the new card, you’ll enjoy that 0 percent intro APR again. Here are just two examples of how it can work for you: Wells Fargo Business Platinum Credit Card
The Wells Fargo Business Platinum Credit Card offers a 0 percent APR on balance transfers for nine months. After that, the APR will increase to between prime rate + 7.99 percent and prime rate + 17.99 percent. The balance transfer fee is 4 percent. Example: $8,000 balance + $320 fee = $8,320 $8,320 / 9 months = payments of $925 U S Bank Business Platinum Card
The offers 0 percent APR on balance transfers for 20 billing cycles. After that, the regular rate will increase to between 14.99 percent to 23.99 percent. The balance transfer fee is 3 percent. Example: $8,000 balance + $240 fee = $8,240 $8,240 / 20 months = payments of $412 It may seem obvious to take the longest intro APR period you can get, but that’s not necessarily the best idea. You may not need that much time and the rewards may be better on one card over the other. So research the offer that best serves you, not just for this circumstance but on into the future. If you choose to use a balance transfer card, be conscious of making your payments on time. If you’re late, and you’ll have paid the transfer fee for nothing. Make a plan for after the balance is repaid
It’s a good idea to get the for you and your company and to use it effectively. It might be a 0 percent APR card, and in that case, plan ahead for the upcoming rate increase. Mark your calendar with the date it will rise and prepare to zero it out before it does. Once the regular rate of interest does go into effect, keep revolving debt to a minimum. Paying the entire bill during the interest-free is great because the 25 or 30 day loan will be free, but there’s nothing wrong with charging an expensive purchase and paying it off in a few installments. Yes, you’ll be charged financing fees, but they won’t be too much if you pay it off within a few months. The bottom line
That zero-interest loan your business credit card granted you has conditions, like any other business loan. Take full advantage of those terms, but strategize your next move in advance. In short, when you realize your business credit card’s 0 percent introductory rate will soon adjust upward, don’t panic—plan! *The information about the Wells Fargo Business Platinum Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer. SHARE: Erica Sandberg is a credit and money management expert who began her career at Consumer Credit Counseling Service (CCCS). There, she helped individuals and families overcome their debt issues and developed budgets, then transitioned into the agency’s primary media spokesperson. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Related Articles