How to Save Money with a Business Credit Card Balance Transfer

If you have a decent amount of debt on your business credit card on which the interest rate is killing you, you may be thinking about transferring the debt to a new card that offers a lower introductory interest rate. Before doing that, however, there are a few things to consider. You should consider whether a zero APR is the best option, whether the "real" APR when it kicks in is lower than your original, and the number of times you will need to do a balance transfer. Each of these can have an effect on your interest rate as opposed to principal, or on your credit score.

First, know that a balance transfer is indeed a great way to pay off your principle debt. Credit card interest rates can be as high as 24%, which can almost wipe out any payments you make to the principle. However, don't instantly apply to the first card you see with a 0% introductory APR. Some of these low APRs may be illusory, pulling you into a card plan that will ultimately have a higher interest rate.

And this is what can kill you.

Some 0% introductory APR cards will end up with such a high APR after the introductory period that they make moot any savings you will have accrued after your balance transfer. Look for a card that will end up with an APR equal to or less than the one you have now, and that has a 0% to 3% introductory APR for the first six months to year. A 3% APR can still result in a terrific savings.

If you do happen to use a 0% APR card that ultimately switches to a higher interest rate than your original card, you may find yourself transferring your balance again and again, constantly chasing the zero. This can cause problems, however.

Switching debt from one card to another, say, more than once in a 12 month period, can affect your credit rating. In addition to this, your credit score can be badly marked by constant canceling of cards or having more than a few cards in your name. And of course, a poor credit rating can ultimately lead you to higher interest rates.

So what is the upshot of all this?

Look for a business credit card that has a low, if not zero, introductory APR. Read the terms carefully. See what the APR will be after the introductory period. Also, keep an eye out for hidden terms and fees that apply to balance transfers. Try not to transfer a balance more than once a year, so low APRs all around are best. Unfortunately, all this will require a bit of digging into the sometimes wordy terms of the various credit cards, but there is no way out of that. With some ground work, you will be able to find a terrific business credit card that will allow you to pay off your principle without painful interest rates.

To make it easier, compare the business credit card applications at Web Biz Credit.com by clicking here. Jake Everett is a regular contributor at Web Biz Credit.com, offering regular tips on selection and comparison of business credit cards.