How to reduce debt of business credit card?
Let’s check steps to reduce business credit card debt. In business many owners often experience financial crisis. This crisis may be a result of loss due to various reasons. It may be result of debts due to loans taken and many such reasons. Sometimes, conditions worsen to an extent that even the business has to be shut down. Here we are going to discuss restrictions in finances due to business credit card. So, let’s check how to get out of business credit card debt.
Many business owners do their transactions via business credit cards. Business owners who use this method face difficulties as the purchased items do not move quickly as expected. This creates problem for entrepreneur to pay debt of business credit card.
Many times the debt on credit cards get accumulated to very high amount and business owners get stress as they do not understand how to come out of this crisis. But there are many ways to deal with this situation and come out of debt of credit card. Here we are going to discuss how one can lower the debt on credit card.
Insist lower interest rates from your creditors
This is very simple. You just have to make call to your creditors. If you have a good credit score then you can convince your creditor for lower interest rates. The reason behind this is the fact that creditors believe that person with good credit scores has ability to pay off the credit line really fast.
You should make payment on your cards really fast. Choose your creditor and make sure you remain in touch with him and make payments fast. By doing so, it will be easier for you to deal with the creditor for lower interest rate.
Clear Off One Card First
Usually different businesses have different business credit cards. Many or few of them are in debt at some time. In this situation you should try to clear the debt of one card and then try to do the same for other. Then you might think which card is better to pay, the one with lower interest or one with higher. Here, if you wish to increase your credit score then you should think of paying for the card that is used highest. However if you choose to pay less interest,opt paying for the one with highest interest.
Transfer your Card Balance
You can also try transferring your balance from card with high interest rate to one with lower interest rate. This one step can save hundreds of dollars every year. But you should also take care that you manage to pay the entire debt of lower interest rate card. Try to pay all your monthly payments on time. If you fail to do so you can land up paying even more interest than the earlier one. You should also remember not to pay for purchases with the transferred card as the lower rate is not applicable for it. One other important thing to remember is that around 3-4 percentage of balance fee is levy on the amount transfer.
OptPeer to Peer Lenders
You would personally wish to pay of the entire debt of all the cards at once and then live a free life. But this is not possible for most of the people. However you can take help of peer to peer lenders and the ones based online are even better. You can opt from many peer to peer lenders online such as lendingclub.com and prosper.com. These sites are good at lending money at lower interest rate. Hence you can save money by borrowing money from peer to peer lenders in order to clear business credit card debt.
This option is similar to peer to peer lending but here one does not take loan from peer lenders. In this case the person takes loans from a financial institution at lower rate and clears the debt on business credit card with higher interest rate. Before applying for the loan you should calculate the entire amount properly. This is not a very good option to pay off the debt as you are just transferring your debt from one place to another.
We have discussed various means by which you can reduce your business credit card debt. You have to decide which mean is more useful to you and can save your money.