What Are Balance Transfer Business Credit Cards?

Business credit cards are an essential tool for many entrepreneurs, offering financial flexibility when you need it most. But over time, the balance on a card can add up, and if you don’t keep up with payments, interest with it. A balance transfer business credit card can help ease the burden on your business, with the ability to consolidate debts, save on interest, and move capital around to focus on growth.

What is a balance transfer business credit card?

A balance transfer business credit card is a financial tool designed to help businesses manage existing credit card debt more effectively. 

• You can move outstanding balances from one or more credit cards to a new card, typically with a lower interest rate or even a 0% introductory APR for a set period.
• This helps you save on interest costs, giving your business a chance to reduce the principal balance. 
• By consolidating debt into one account, it simplifies repayments and can improve cash flow management. 

However, the value requires making the most of the initial, low-interest period – known as the introductory period – to maximise savings and ensure the balance is cleared before higher interest rates kick in.

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How does a business balance transfer card work?

Here’s how a balance transfer works in practice:

1. Apply for a new card: Look for a card with favourable terms, including 0% introductory APR offers and low transfer fees.
2. Request the transfer: Once approved, you’ll provide the new card issuer with details of the debt you want to transfer.
3. Clear the debt: Use the introductory period to pay down the transferred balance without accruing interest​​.

Always make the minimum monthly payment on time to maintain the promotional terms. Missing a payment could void the 0% interest offer, resulting in higher costs​.

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Why consider a business balance transfer credit card?

1. Lower interest payments

With introductory 0% APR periods, you can focus on paying down the principal without worrying about interest piling up. This is especially beneficial if your business already carries high-interest debt​​.

2. Debt consolidation

You can streamline your finances by consolidating multiple credit card balances onto one card. This simplifies repayment and reduces the risk of missed payments​​.

3. Improved cash flow

Free up cash for essential operations or unexpected expenses by reducing interest payments. This can be a major lifeline for businesses that go through seasonal revenue fluctuations, like travel or hospitality businesses​​.

4. Expense tracking and perks

A secondary consideration, but one that can be handy for certain businesses, is that many balance transfer cards come with tools like detailed monthly statements, cashback rewards, or travel perks.

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Potential drawbacks of balance transfer credit cards

While these cards offer valuable benefits, it’s important to be aware of the potential downsides:

• Balance transfer fees: Most cards charge a fee of 3–5% of the transferred balance. Be sure to factor this into your overall cost calculations​​.
• Reverting APRs: Once the introductory period ends, standard interest rates apply, which can be significantly higher than the original card​.
• Eligibility Requirements: Business credit cards typically require a strong credit profile for approval, which might be a challenge for new or smaller businesses​​.

How to choose the best business balance transfer credit card

When comparing options, consider the following factors:

1. Introductory interest rate: Look for 0% APR or a low fixed rate during the promotional period. Ensure the duration aligns with your repayment goals​​.
2. Transfer fees: Evaluate the cost of transferring your balance. For large balances, even a small percentage can add up​​.
3. Post-promotional APR: Understand what the interest rate will revert to after the introductory period. A high ongoing rate could erode the benefits if the balance isn’t cleared in time​. 
4. Credit limit: Check that the credit limit is sufficient to cover the balances you want to transfer, especially if you have multiple accounts​.

Perks: Consider cards that offer benefits like cashback, rewards points, or expense management tools.

How to use a balance transfer card

A balance transfer card isn’t a silver bullet for credit card debt – you’ll need to think carefully about how to make the most of it.

1. Set a clear repayment plan: Calculate how much you need to pay monthly to clear the balance within the promotional period.
2. Avoid new purchases: Most introductory offers apply only to transferred balances, not new transactions. Adding purchases could lead to higher costs​.
3. Automate payments: Set up direct debits to ensure you never miss a payment and lose the promotional rate​.
4. Keep an eye on fees: Be aware of late payment penalties, cash advance fees, and other charges that could offset savings​​.

Alternatives to balance transfer cards

If a balance transfer card doesn’t meet your needs, explore other financing options:

A short term loan can offer flexible financing for larger expenses or long-term investments, without the need to manage introductory periods and risk high interest rates. 

Over 90,000 businesses have used an iwoca Flexi-Loan to manage their growth, from investing in new opportunities to freeing up working capital.

• Funding that matches your ambition: Borrow £1,000 up to £1 million, draw down just what you need and only pay interest on what you use.
• Streamlined application: With quick online applications and funding in as little as 24 hours, iwoca makes it easy to get the cash you need quickly and painlessly.
• Customisable terms: Flexible loan terms up to 60 months offer control over repayment structures, with the ability to overpay or repay early with no fees.

Learn more about how to apply for a business loan, or check out our handy business loan calculator.

Balance transfer business credit cards FAQs

Do all business credit cards offer balance transfers?

No. While some cards specialise in balance transfers, others focus on rewards or expense management. Be sure to check the card’s terms​​.

Are balance transfer business credit cards available in the UK?

Yes, there are several balance transfer business credit cards available in the UK. Some leading options include cards from Metro Bank, Capital on Tap, and NatWest. These cards often come with introductory 0% interest offers and other perks​​​.

Are there risks associated with balance transfer business credit cards?

Risks include:
• Losing promotional rates if you miss payments.
• High transfer fees that reduce savings.
• Reverting to high interest rates after the promotional period.
• Mitigate these risks by choosing a suitable card, planning repayments, and reading the terms carefully​.