A business credit card with a low interest introductory rate can be a lifeline for small companies operating on tight budgets, as well those in industries where slow payment times can create cash flow issues.
âSwitching to zero APR offers, especially balance transfers, makes the most sense when you’re looking to fund a longer-term need,â said Jim Pendergast, senior vice president at altLine, a division of The Southern Bank Company. âThink new office equipment or business software that supports operations but won’t necessarily directly contribute income or lower your debts.â
But the key to using these cards effectively is to read the fine print and âunderstand how long to expect this introductory offer to last and what the APR is after the offer expires,â Pendergast said.
Keep in mind that there are a lot of great business credit cards out there with competitive cash back rewards and travel points. Many also offer 0% APR introductory rates on purchases only.
If you are specifically looking for a card that will allow you to do a balance transfer at 0% interest, make sure you read the terms and conditions before you apply to ensure youâre getting the right card for your companyâs needs.
U.S. Bank Business Cash Rewards World Eliteâ¢ MastercardÂ®*: Best for bonus and cash back rewards
U.S. Bank Business Platinum Card: Best for long introductory APR
Wells Fargo Business Platinum card*: Honorable mention for cash back rewards
Best balance transfer business credit cards for 2021
The following cards include introductory rates on both purchases and balance transfers as of this writing:
U.S. Bank Business Cash Rewards World Eliteâ¢ MastercardÂ®: Best for bonus and cash back rewards
Pros: This U.S. Bank card gives accountholders a 12-month 0% APR rate plus the chance to earn a $500 bonus if you spend $3,000 within 90 days of opening the card. Youâll also earn 3% cash back for purchases at gas stations and office supply stores, as well as expenses paid using the card at your cell phone provider. Additionally, you can earn 1% back on all other qualifying charges.
Cons: If an extended 0% interest period is your priority, the U.S. Bank Business Platinum Card provides more flexibility.
The bottom line: The U.S. Bank Business Cash Rewards World Eliteâ¢ MastercardÂ® affords both breathing room for paying off debt while earning cash back on commonplace business expenses.
U.S. Bank Business Platinum Card: Best for long introductory APR period
Pros: The U.S. Bank Business Platinum Card comes with a 0% APR on purchases and balance transfers for 15 months when you open an account. That means youâll have more than a year to pay down transferred debt interest-free, enabling your business to save money and manage debt over time. Thereâs no annual fee for the card.
Cons: Unlike other business cards, including other offers from U.S. Bank, the Business Platinum Card does not include cash back rewards or a sign-up bonus.
The bottom line: This card is a great option if youâre looking for a long 0% APR period to pay down current debts.
Wells Fargo Business Platinum Credit Card: Honorable mention for cash back rewards
Pros: The Wells Fargo Business Platinum Credit Card includes a nine-month 0% APR introductory rate for purchases and balance transfers, while also allowing you to earn 1.5% cash back for every dollar charged. You donât have to worry about a hefty annual fee, either, as there is no fee for this card.
Cons: The 0% APR period is substantially less than that of the U.S. Bank Business Platinum Card at nine months versus 12. This cardâs cash back earnings are also much less competitive than youâll find with some other companies.
For instance, Chaseâs Ink Business UnlimitedÂ® and Ink Business CashÂ® credit card both have no annual fee, offer a $750 cash back bonus if you spend $7,500 in the first three months and have a 12-month 0% APR on purchases.
The Business Unlimited card comes with an unlimited rewards perk of 1.5% on all purchases, while the Business Cash Card allows you to accrue 5% cash back on the first $25,0000 spent on select business expenses each account anniversary year; 2% back on the first $25,000 spent on restaurants and gas per anniversary year; and 1% on all other purchases.
The bottom line: The Wells Fargo option is solid if you need some time to pay down existing balances and want to earn cash back in the process.
See related: How to transfer a balance to a Wells Fargo card
How do business balance transfers work?
A business balance transfer functions the same as personal transfers. Once your new account is set up, you can initiate a transfer either online or by submitting a paper check. Make sure that the transfer amount does not exceed your new credit line.
After the transfer processes, the old account will be paid off if you had enough credit to cover the full balance. If there is still a remaining balance on the old account, pay it down as quickly as possible to minimize your interest costs.
The transfer amount will appear on your new account balance, and you can begin making payments toward that principal right away.
lower your credit score. Itâs simply a means of using one card to pay off another. However, a new credit card application generally results in hard inquiry on your credit report, which could lower your score by a few points.
Does a balance transfer affect my companyâs credit profile?
Although a balance transfer wonât lower your credit score directly, it can affect your credit profile. When you open a new account, the age of your credit (amount of time your accounts have been open), decreases. That can negatively affect your credit score, since a higher account age counts favorably on your report.
On the other hand, if a balance transfer enables you to pay down debt faster, your credit utilization ratio (how much credit you have access to versus how much youâre using) will improve.
âFor business cards and some credit lines, it’s generally advised not to exceed 30-40% of your total credit limit each month,â Pendergast said. âGoing overboard with credit reliance might signal to lenders you can’t manage stable cash flows, therefore upping your risk profile and making securing financing in the future that much harder.â
See related: How to build business credit
Can a business balance transfer help you improve your businessâs credit?
Again, the transfer itself wonât do much on the face of it. But it may help you pay off your debt on time and with minimal cost on top of the principal, and on-time payments are the No.1 element in determining credit scores.
Additionally, a new card increases your overall available credit, which could lower your credit utilization ratio (and help your score) if you keep all of your card balances as low as possible.
How much does a balance transfer cost?
The cost varies according to the card company, and it may be a flat fee or a percentage of the amount you want to transfer.
Can I transfer a personal balance to a business credit card?
Yes, you can transfer a balance from a personal card to a business card. However, itâs highly important to keep your personal and business expenses distinct. If you used a personal card for business expenses and can document that, itâs a good idea to keep those records organized, especially come tax time. Combining your expenses can lead to serious problems down the road.
âSeparating the two helps prevent commingling funds from the get-go, not to mention makes tracing and documenting important transactions far easier come tax filing,â Pendergast said.
How do I qualify for a balance transfer credit card?
The criteria for qualifying for a business credit card include having good credit, on both business and personal levels.
âItâs important to know, though, that a business credit score is linked to a personal credit score,â said Paramita Pal, interim head of U.S. Bankcard at TD Bank. âIf a small business owner misses payments or stops paying personal loans, it will negatively affect their ability to secure business credit cards.â
In addition to maintaining your own credit, you may need to provide documents on your companyâs finances.
âTo evaluate a prospective borrower, banks will look at a variety of factors, including credit history,â Pal said. âBusiness owners may need to provide personal financial information, such as income and debt statements, as well as business information such as legal structure, annual revenue, number of employees, average expenses, etc.â
How do credit card APRs work?
The cards included in this article were evaluated by reviewing the terms on a number of business cards offered by prominent credit card brands and selecting those which offered terms favorable to business owners specifically seeking balance transfer benefits.
*All information about the U.S. Bank Business Cash Rewards World Elite Mastercard and the Wells Fargo Business Platinum card has been collected independently by CreditCards.com and has not been reviewed by the issuer. These cards are no longer available through CreditCards.com.