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Can You Transfer Business Credit Card Balances?

Can You Transfer Business Credit Card Balances?

Can You Transfer Business Credit Card Balances?
Can You Transfer Business Credit Card Balances?

Can You Transfer Business Credit Card Balances?

Business credit cards can accumulate high balances just like personal cards. Transferring those balances to a new 0% card may seem appealing to save on interest. However, transferring business credit card debt to a new account involves unique considerations.

How Business Credit Cards Work

Business credit cards function similarly to personal cards but are designed for company expenses. They:

  • Are issued in the company’s name with employee cardholders
  • Allow tracking of business spending separately
  • Provide rewards like cashback, points, or miles on purchases
  • Offer features tailored to manage company budgeting and accounting

Balances represent debt owed by the business itself, not individual employees.

Benefits of Business Card Balance Transfers

The benefits of transferring business card debt to a 0% balance transfer account mirror those for personal debt:

  • Temporary halt on interest accrual during 0% intro period
  • Consolidation into one payment for simplified tracking
  • Saves on interest expenses over time
  • Frees up credit on old cards by moving balances
  • Allows focus on debt paydown during promotional window

Reduced interest and streamlined repayment workflow make transfers appealing.

Types of Business Card Balance Transfers

Business balance transfers primarily come in two forms:

Business to Business Transfers

Moving debt from one business credit card over to a new business card offering a lower introductory interest rate.

Business to Personal Transfers

Transferring business credit card balances onto new personal credit cards with promotional 0% APR offers.

Each approach has pros and cons to weigh. Personal cards often offer better rates but business cards provide tracking tools.

See also  Will Closing an Old Card Hurt Credit

Challenges of Business Card Balance Transfers

Key difficulties associated with transferring business credit card balances include:

Separate Personal and Business Credit Reports

Personal credit reports and scores are distinct from business credit profiles. Transferring business debt to personal cards can impact personal credit.

Legal Liability for Debt

While intended for company use, small business owners are usually personally responsible for repaying card balances.

Limitations on Reporting Business Debt to Personal Credit Bureaus

Not all business card issuers report card history to personal credit reports, limiting potential credit-building benefits.

Business Card Restrictions

Many business cards prohibit balance transfers or cap transfer amounts to small percentages of the total limit.

Evaluating Top Business Card Transfer Options

The best business card balance transfer options based on research include:

Wells Fargo Business Platinum Credit Card

  • 0% intro APR for 15 months on transfers
  • No annual fee or transfer fees
  • Strong 3% cash back rewards

Capital One Spark Cash Plus

  • Intro 0% offer for 9 months
  • $150 cash bonus after spending $5,000 in first 3 months
  • Unlimited 2% cashback on all purchases

Ink Business Unlimited Credit Card

  • 0% APR for first 15 months on transfers and purchases
  • No annual fee
  • 1.5% cashback on all purchases

Strategies for Successful Business Balance Transfers

Follow these tips when transferring business card debt to maximize benefits:

  • Compare offers from both business and personal card issuers
  • Check if existing business cards allow transfers or limit amounts
  • Have a plan to pay down transfers aggressively within promo windows
  • Continue making minimum payments on old cards until balances transfer
  • Be cautious about business to personal transfers impacting personal credit
  • Close old business accounts to avoid reuse after paying off
See also  Paying Off Credit Card Debt with Balance Transfers

The same diligent process applies for maximum business balance transfer success.

What if Business Transfers Are Not Allowed?

If existing business cards prohibit balance transfers, consider these alternative approaches instead:

  • Call issuers to request hardship programs or temporary rate reductions
  • Discuss options for modifying payment plans or forgiveness programs
  • Open new 0% business cards for major purchases rather than transfers
  • Use business profits or financing to repay debts in full over time
  • Shift business expenses to a lower-rate personal card with transfer offer

While not ideal, unable to transfer business debt does not eliminate all options for reduction.

Tax Implications of Business Card Balance Transfers

One key consideration for businesses is the potential tax impact of balances transfers:

  • Transferred interest that would have been tax deductible becomes non-deductible
  • Paying down principal faster provides fewer total interest deductions over time

Consult a tax advisor on implications. The interest savings likely outweigh the lost deduction benefits in most cases.

Key Takeaways

  • Business cards allow tracking and rewards for company expenses.
  • Transfers consolidate business debts but may influence personal credit.
  • Business card restrictions can limit transfer amounts more than personal cards.
  • Compare top business cards and personal cards offering 0% intro rates.
  • Have an accelerated payoff plan for any transferred business debt.

While useful in some cases, business balance transfers warrant careful consideration of pros, cons, restrictions, and impacts before proceeding.

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