If you own a small business then chances are you have already discovered that banks are not really your best friend but low interest balance transfer credit cards can be.
Running a business can be a bit like a roller coaster ride. There are the times when you are up and everything is going great then there are the times when everyone wants your cash and sales are down.
As your business grows and changes you will have times when you need access to low interest money. Unless you have a rich uncle somewhere, you have most likely run into the paper mill at the bank that makes you churn out statements after statements and dig up papers you didn’t know you had, and then they say no.Credit: morguefile.com
Wearing All the Hats
So, now you not only need to keep running your business and growing it but you also have to become very creative with financing, and there are ways to do this that are cost effective and if you stay on top of the rules of the game, you will win.
I received one of these low interest balance transfers in the mail and was about to throw it out because I didn’t have anything to transfer. I was managing to pay my business Visa bill each month with my day to day purchases and costs on it, but what I really needed was money for a used pickup truck and maybe some equipment.
But then I thought about it some more and since the offer said I was already “pre-approved I decided to go for it. I couldn’t get cheap advance money from them, so instead I found a used pickup truck for under 5000.00 and put it on my regular credit card from a dealership. (I didn’t want to spend more than I could comfortably pay back in the 18 months of low interest).
I then waited a couple of weeks so it would show on my statement and then just before my regular credit card was due, I phoned the new one up and asked them to transfer the balance (the truck purchase) to their new low rate one.Credit: morguefile.com
Balance Transfer Low Interest - Easier on the Budget
I was quite proud of myself. I had purchased the truck and had it for 3 weeks before I transferred the cost to the new card and then I worked out how long the deal was on for which was 18 months. So, I then started my own payment plan of 280 per month which worked out much better for us rather than taking 5000 dollars from our business to pay for the truck.
Spreading these payments out made getting this truck an affordable option. If you have a regular 9 – 5 job, car companies and banks are usually ok with car payments as you have proven income, but many small businesses get denied. So, we have to get creative!
Don't Use This Account For Any Other Purchases
Now this is where you do have to wear the bookkeeping hat and stay on top of this account. The way these credit card companies that offer low interest balance transfers work, is to ding you big time for other purchases you may put on this card.
If you start to make your payments and then use this card for regular business purchases, the payment you make will go directly to the low interest and not the purchases which will sit there and gather huge interest costs over those 18 months.Credit: morguefile.com That can be hard to watch when you get your statements. It will show your transfer being paid down and the purchases accumulating interest! They have won at this game if you do that, so keep a separate card for your purchases and put this other one away somewhere so you don’t use it or be tempted to use it.
Divide The Amount by the Months the Deal is On then Make Payments
So use this card as your new bank. Pay it off before the deal runs out. Work out how much per month you need to pay and pay it, or before you know it the 18 months will have come and gone and you don’t have the money to pay for it and that cheap truck would now cost a lot more. Many of these credit cards have regular interest of 18% or higher on purchases so be careful.
Keep the due date written and highlight it, put it as a reminder on your phone or computer. Don’t forget this date, they will not remind you. They hope that you will be too busy to notice.
So, if you run a business and need extra cash then look around there are many card companies after your business and take advantage of them as long as you are mature about it!
These balance transfer cards may well become your new best friend or partner in your business.
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