0% APR Business Cards: What You Need to Know
As a business owner, managing your finances effectively is crucial to the success of your venture. One way to do this is by using a business credit card with a 0% APR (Annual Percentage Rate) promotional period. This can help you save money on interest charges and allow you to focus on growing your business. In this article, we'll take a closer look at 0% APR business cards, how they work, and what you need to know before applying.
What is a 0% APR Business Card?
A 0% APR business card is a type of credit card that offers a promotional period with a 0% interest rate on purchases, balance transfers, or both. This means that during the promotional period, you won't be charged any interest on your outstanding balance. The length of the promotional period varies depending on the card issuer, but it can range from 6 months to 21 months.
How Does a 0% APR Business Card Work?
Here's an example of how a 0% APR business card works:
- You apply for a 0% APR business card with a 12-month promotional period.
- You're approved for the card and make a purchase of $10,000.
- During the 12-month promotional period, you won't be charged any interest on the $10,000 balance.
- After the promotional period ends, the regular APR (e.g., 15.99%) kicks in, and you'll be charged interest on any outstanding balance.
Benefits of 0% APR Business Cards
Save Money on Interest Charges
The most significant benefit of a 0% APR business card is the savings on interest charges. This can be especially useful if you need to make a large purchase or finance a project.
Improve Cash Flow
By not having to pay interest charges, you can improve your business's cash flow and allocate funds to other essential expenses.
More Time to Pay Off Debt
The 0% APR promotional period gives you more time to pay off your debt without incurring interest charges.
Things to Consider Before Applying for a 0% APR Business Card
Regular APR
Make sure you understand the regular APR that will apply after the promotional period ends. This can be significantly higher than the promotional APR.
Fees
Check for any fees associated with the card, such as annual fees, late payment fees, or foreign transaction fees.
Balance Transfer Fees
If you plan to transfer an existing balance to the new card, check the balance transfer fee, which can range from 3% to 5% of the transferred amount.
Credit Score
A good credit score is usually required to qualify for a 0% APR business card. If you have a poor credit score, you may not be approved or may be offered a higher interest rate.
Top 0% APR Business Cards
Here are some of the top 0% APR business cards available:
Ink Business Cash Credit Card
- 0% APR for 12 months on purchases and balance transfers
- $0 annual fee
- 5% cash back on office supplies, internet, and phone services
Capital One Spark Cash Select for Business
- 0% APR for 9 months on purchases
- $0 annual fee
- 1.5% cash back on all purchases
American Express Blue Business Plus
- 0% APR for 12 months on purchases
- $0 annual fee
- 2x points on all purchases up to $50,000 per year
In conclusion, a 0% APR business card can be a valuable tool for business owners who need to manage their finances effectively. By understanding how these cards work and the benefits they offer, you can make an informed decision and choose the right card for your business needs. Always remember to read the terms and conditions carefully and consider your credit score, financial situation, and business goals before applying.
