Balance transfer business credit cards explained
Learn how business balance transfer credit cards work and how to choose the right card for your business.
A balance transfer business credit card can help you repay existing debt at a lower cost.
Is high-interest credit card debt restricting cash flow? Moving it to a card with a lower rate can save money, help you pay it off quicker, and improve cash flow.
Key takeaways
A business balance transfer credit card can help you pay off existing debt faster and at a lower interest rate
Most business balance transfer cards charge a transfer fee of around 3% of the amount moved
Some balance transfer business credit cards charge no interest for a set time, but it’s important to clear your balance before this period ends
A business debt consolidation loan could be a better alternative if you have multiple types of debt to repay
Earn rewards with a business credit card
A business credit card can help you manage expenses, boost cash flow and earn rewards as you spend. Compare options to find the best-suited card for your business.
What is a balance transfer business credit card?
A balance transfer business credit card can be a useful tool for paying off existing debt at a lower cost. It enables you to shift outstanding debt from existing credit cards to a new card with a lower annual percentage rate (APR) or even an interest-free introductory period.
This can give your business some breathing room, allowing you to pay down credit card debt faster and reduce interest costs. However, be aware that these cards generally come with stricter eligibility criteria.
How does a business balance transfer card work?
A business balance transfer card lets you move debt from one or more high-interest credit cards onto a new card, usually at a lower interest rate or with a 0% introductory period. This can save your business money on interest and make repayments easier by consolidating multiple debts into a single monthly payment.
To use one, you first apply for the card and check the key details, such as:
the introductory rate
how long it lasts
the balance transfer fee (usually a percentage of the amount you move)
Once approved for a business credit card, provide your existing card details so the provider can transfer your debt.
After the transfer, you'll make monthly repayments to the new card. It's important to pay at least the minimum each month (and ideally more) so you can clear your balance before the 0% or low-interest period ends. This ensures you avoid higher interest charges once the promotional period expires.
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Pros and cons of a balance transfer business credit card
Before applying for a business balance transfer card, it’s important to weigh up the benefits and disadvantages:
Pros
Low or 0% interest – You can save on interest payments, helping pay off your debt faster
Debt consolidation – A business balance transfer card can enable you to move multiple credit card balances to one card for easier management
Improved cash flow – Using a balance transfer business card can help free up cash for other business needs
Potential perks – Some business balance transfer cards offer other benefits, such as expense tracking
Cons
Balance transfer fees – Most balance transfer business credit cards charge a fee of around 3% of the transferred balance
High standard interest after introductory period – If your balance transfer credit card offers a 0% or low-APR period, be aware that the rate can jump significantly when this offer expires
Limited transfer amount – Most cards only let you transfer a portion of your available credit, typically around 90% to 95% of your credit limit
Eligibility requirements – Lenders often require good business credit or a personal guarantee from a director
How to choose the best business balance transfer credit card
When looking for a balance transfer credit card for your business, it’s important to consider the following factors:
Length of introductory period
Look for a business credit card that offers a 0% or low-APR introductory period on balance transfers. The longer this is, the more time you have to repay your debt at a more favourable rate of interest.
Standard APR
Check how much interest your card charges once any introductory period has finished.
Transfer fees
Most balance transfer cards charge a transfer fee. You ideally want to pick a card with a low fee.
Credit limit
If you can, find out what your credit limit will be, and how much of this you can use for a balance transfer.
Eligibility criteria
Make sure you meet all qualifying criteria before you apply, otherwise the lender may reject your application.
Additional perks
Check whether your chosen card offers additional benefits, such as expense tracking. However, this might not be the top priority with a balance transfer card.
Read more:
Balance transfer business credit card alternatives
If you want to reduce the cost of existing business debt, a main alternative to a balance transfer card is a business debt consolidation loan. This lets you borrow a lump sum to pay off multiple debts, then repay it in fixed monthly instalments over a set term.
There are two main types of consolidation loans:
Secured loans – Require an asset, like property or equipment, as collateral. If you fail to repay, the lender can seize the asset. In return, these loans usually allow you to borrow more at a lower interest rate.
Unsecured loans – Don’t require collateral, though approval depends on your business’s creditworthiness and you may need to provide a personal guarantee. These loans often charge higher interest rates and may not cover all debts, but they carry less risk for the borrower.
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In conclusion
Business balance transfer cards can be a useful tool for managing high-interest credit card debt, consolidating balances and freeing up cash flow. However, it’s important to consider interest rates, fees and credit limits before choosing a card, and ensure you have a repayment plan in place so you pay off your debt as quickly as possible.
Business balance transfer credit cards FAQs
In most cases you can't transfer from a personal credit card to a business credit card. The majority of card providers only allow you to transfer balances between eligible business credit cards. But it's worth double checking the terms of the card first.
The exact time a balance transfer takes differs by provider, so there's no set benchmark. They're rarely instant though, so expect it to take at a few working days at least.
Yes, you're free to use the card for purchases so long as there's still credit available after the transfer takes place. But bear in mind any new purchases may be charged at a different interest rate, so be sure to check the terms of the card carefully.
It depends how much you need to transfer. You may not get the same credit limit on a new balance transfer card, which means you wouldn't be able to transfer the full balance of your old card to it. Some card providers also cap the transfer limit at a percentage of the available credit limit of the new card.
About Rachel Wait
Rachel has spent the majority of her career writing about personal finance for leading price comparison sites and the national press, including for the Mail on Sunday, The Observer, The Spectator, the Evening Standard, Forbes UK and The Sun.
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