Avoiding a Business Credit Card Debt

Instances in Which You Should Not Use Your Business Credit Card
March 26, 2014
Questions You Should Ask Your Business Credit Card Provider
March 28, 2014

A business credit card debt is really easy to accumulate since interest rates on these cards are often high. So how can you avoid this debt or at least bear only a minimum burden? Here is what we have to advise in this regard.

Opt for a card that has no service fees

Though many business credit card providers charge a service fee, there are still some that do not. Go for one of these so that you do not have to pay anything when you do not use the card. With some business credit card providers, these charges are waived if your purchases accumulate to a certain amount. As long as this is close to your card spending, you can even go for this option. However, if it is too high, it will not serve the purpose.

Select a business credit card that has a grace period

A grace period is a feature offered by some business credit card companies which helps you keep a control over your debt. In this period, no interest amount is incurred on your balance and you only have to pay the amount, which you actually spend.  So try to pay your balance within this period. should you not do this, an additional finance charge is added, which increases your debt more.

Make sure your payments are timely

A business credit card can be really expensive to keep if you do not monitor your usage. Delay your payments and once again, the providers charge you a penalty for it. In case, the amount is too high, at least pay the minimum value so that you can avoid this penalty.  Obviously, our advice is that you should try to pay the full balance so you do not have to pay any interest.

Watch out for your credit limit

Every business credit card is capped by a certain amount, and you cannot exceed that. Should you do this, you will have to pay a penalty or a fee, depending on your provider. If your provider charges a fee, there is a limit to that as well. If these are crossed, you will not be able to make any more transactions with your business credit card for that month.

Ensure your account has enough money

If the check which you write to the business credit card provider bounces back, you will have to pay them an additional fee, which is nearly $40. So before you give them any checks, make sure your account has enough amounts to cover that payment and even any additional pending transactions.

Avoid using the cash advance feature

Many business credit cards allow you to draw cash on them, but this is always associated with a fee, which is a percentage of the amount you withdraw. These fees are often not waived and so you should not use the cash advance feature.  You will also not be entitled to any grace period, and your debt will rise significantly.

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