Business credit cards can be a valuable tool, and that’s especially true for business owners who don’t plan to carry a balance. After all, credit cards tend to be a poor long-term borrowing option due to the high APRs they charge, yet business owners who don’t carry a balance get the chance to earn rewards and access cardholder benefits.
Still, some business credit cards can be good for debt consolidation, although only for a short period of time. To make the most of these business balance transfer offers, you should learn how they work and how you can set yourself up for success.
What is a business balance transfer card?
Business credit cards for balance transfers give new cardholders the chance to consolidate debt at 0 percent APR for a limited time. Business owners are required to pay a balance transfer fee upfront in order to initiate the transfer, yet the savings accrued during the introductory period can make paying this fee an excellent investment.
If you’re considering a balance transfer credit card for business, you’ll want to compare all the options in terms of the length of their introductory offers, the fees they charge and the cardholder benefits you get access to. If you plan to use your card for purchases, you should also look for 0 percent intro APR business credit cards that reward you for each dollar you spend and offer a low interest rate on purchases.
How do business balance transfers work?
Business balance transfers work similarly to balance transfers you make with a balance transfer credit card for consumers. A business balance transfer credit card will approve you for a specific limit, and you’ll get the option to use part or all of that limit for other debts you transfer to your new card.
We already mentioned how balance transfer fees will apply, but there are other pitfalls to be aware of. For example, you should know that your personal credit will be considered when you apply for a business credit card, and that any business debt you carry can affect your personal credit, as well. Not only can high balances be reported to the credit bureaus—causing your overall credit utilization to surge—but any delinquencies or late payments on your business credit card can affect your personal credit, as well.
With these details in mind, business balance transfers work best for people who are serious about paying off their bills. While transferring balances among cards can temporarily impact your credit due to changes in utilization and hard inquiries on your credit report, paying off debt should ultimately improve your credit score in the long run.
Best business balance transfer cards for 2021
U.S. Bank Business Cash Rewards World Elite™ Mastercard®: Best for earning rewards
The U.S. Bank Business Cash Rewards World Elite™ Mastercard® gives new applicants an introductory 0 percent APR on purchases and balance transfers for 12 billing cycles, followed by a variable APR of 13.99 percent to 22.99 percent. If you transfer business debts for the purpose of consolidation, you should expect to pay a 3 percent balance transfer fee (minimum $5).
There’s no annual fee, yet you’ll also earn up to 3 percent cash back on eligible gas station, office supply store and cell phone provider purchases, as well as 1 percent back on all regular purchases. You also earn a 25 percent annual bonus (based on the prior year’s cash rewards) on your cardmember anniversary, up to $250. Most importantly, you can start off by earning $500 in bonus cash when you spend $3,000 on your card within 90 days of account opening.
Wells Fargo Business Platinum card: Runner-up for earning rewards
The Wells Fargo Business Platinum card lets you enjoy an introductory 0 percent APR on purchases and balance transfers for 9 months, followed by a variable interest rate 7.99 percent + prime to 17.99 percent + prime. There’s no annual fee and no additional card fee for employees, either.
In terms of rewards, you can earn 1.5 percent cash back for each dollar you spend or 1X points on every $1 spent, as well as a 1,000-point bonus (or $10 cash back) when your company spends $1,000 or more in any monthly billing period.
In addition to earning cash back on regular spending, new cardholders can also qualify for a one-time cash bonus of $500 after spending $5,000 within three months of account opening.
U.S. Bank Business Platinum: Best ongoing APR
The U.S. Bank Business Platinum doesn’t offer any rewards, yet you do get an introductory 0 percent APR on purchases and balance transfers for 15 billing cycles. You’ll pay the regular variable APR after that, which is currently set at 11.99 percent to 20.99 percent based on your creditworthiness.
Also, be aware that a 3 percent balance transfer fee (minimum $5) applies to all balances you transfer to your card for debt consolidation. This card does not charge an annual fee.
When is transferring a balance a good idea?
Business balance transfer cards that offer an introductory 0 percent APR can help you save money when you consolidate debt, yet we all know these offers don’t last forever. To get ahead with a balance transfer credit card, you should have a plan to pay your debt off during the introductory period.
Also, keep in mind that debt consolidation and rewards shouldn’t necessarily mix, mostly because credit card rewards can incentivize you to spend more, thus derailing your debt repayment efforts. If you want to transfer a balance solely to pay off debt, you’re probably better off with a business credit card that doesn’t offer any rewards.
Business balance transfer credit cards FAQ
Balance transfer credit cards for businesses work similarly to personal balance transfer credit cards, yet there are plenty of additional details to keep in mind. The following questions and answers can shed more light on business balance transfer cards and how they work.
Are balance transfers with a business credit card any different from a standard transfer?
Balance transfer credit cards for business work similarly to personal credit cards that extend introductory 0 percent APRs for a limited time. The only difference is, you must be self-employed or a small-business owner to apply for a business credit card.
If you have a small side business and don’t have an Employer Identification Number (EIN), you can apply for a business card using your Social Security number.
Does a balance transfer on a business card affect your business credit score?
Transferring a balance to one of the best small business balance transfer credit cards may affect your business credit due to the factors that make it up. Not only does your payment history influence your business credit score, but so does the age of your credit history and your debt usage.
Is it legal to transfer a balance from a personal card to a business card?
It’s possible to transfer personal debt to a business credit card (or vice versa) with a business credit card balance transfer if the card you’re considering has terms that allow it, but doing so is not a good idea. For the most part, mixing personal and business finances is risky and can make record-keeping for your business much more complicated.
What’s the best business balance transfer credit card for the self-employed?
The best 0 percent balance transfer business credit card for self-employed people depends on their goals. Some cards may work better for people who want to earn rewards, yet others boast longer introductory 0 percent APR offers instead.
The bottom line
If you’re hoping to consolidate debt and save money in the process, then a business credit card balance transfer is worth considering. The best business cards in this space offer an introductory 0 percent APR for 12 months or longer and other valuable perks, although you’ll pay an upfront balance transfer fee to take advantage of the low-interest period.
Also, remember that even the best small business balance transfer credit cards won’t help you out of debt unless you’re dedicated to paying as much as you can during your card’s introductory offer. Make sure you compare the options available right now and have a plan in place to pay down debt before you take the leap.
The information about the U.S. Bank Business Cash Rewards World Elite™ Mastercard®, U.S. Bank Business Platinum and the Wells Fargo Business Platinum card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.