What to do when you don’t pay off the balance on a 0% APR business credit card

The beauty of business credit cards with 0 percent annual percentage rate (APR) offers is that they allow business owners to charge and maintain a balance without interest being applied to the debt. All you have to do is send at least the minimum payment required by the due date. It’s no surprise, then, that these products are attractive to business owners who want to borrow for necessary expenses without having to worry about financing fees increasing the cost.

Unfortunately, few good things last forever — and this benefit ends when the 0 percent intro APR period ends. Depending on the business card, the interest-free time frame typically lasts between nine and 18 months, starting when the account is first opened. After that, the regular rate kicks in.

Thankfully, there are at least two sound methods to manage zero-interest business credit cards when you can’t pay off the entire balance during the introductory APR period.

Develop a payoff plan and tackle the debt

If you want to minimize interest charges while you work your way out of debt, you need to come up with a concrete plan of action. The following steps can help you do just that:

Step 1: Use a credit card calculator to determine your next steps

There are plenty of great 0 percent APR business credit cards, but your best next steps will depend on the exact card you have and its specific intro offer. Let’s say you have the Chase Ink Business Cash® Credit Card, which comes with a 0 percent intro APR on purchases for 12 months, then a regular variable APR of 18.49 percent to 24.49 percent thereafter. And, let’s say you owe $8,000 when the introductory rate expires.

Using Bankrate’s credit card payoff calculator, you’ll know how much the debt will cost you under certain payment scenarios (assuming a 19 percent APR):

Once you have an idea of potential interest charges based on how long you need to repay the amounts you owe, you can decide what to do next. Obviously, how long you’ll need to pay off your debt will depend on how much you can actually afford to pay toward your credit card balance each month.

Also note that we didn’t provide a scenario where you would pay the balance off over more than one year because, in normal circumstances (when interest is applied), credit card debt is not meant to be long-term. If you want to finance something for more than a year, a loan is usually the more appropriate choice.

Step 2: Stop using the card for new purchases

Avoid using the credit card as you are paying the balance off. At this point, you won’t be getting a promotional APR, so the regular APR will be applied to anything you buy. And since you are carrying a balance, you will likely not enjoy an interest-free grace period on your purchases either.

It’s also worth noting that it’s much harder to pay off debt when you keep adding new debt to the pile.

Step 3: Call your card issuer to ask for a lower rate

You can also ask the card issuer to lower the new rate. You do this by calling the number on the back of your card and asking to speak with a customer service representative.

While there’s a chance the card issuer won’t be able (or willing) to honor your request, the worst they can say is “no.”

Transfer the balance to a new 0% APR card

The other option is to use a business credit card balance transfer. This method can buy you more time, though there is an upfront fee — generally 3 percent to 5 percent of the transferred amount. You also have to approach this realistically and strategically. Most issuers require applicants to have credit scores that are at least 670, which is the threshold where “good credit” typically begins. A new credit card will also require you to provide a personal guarantee, meaning you are personally responsible for repaying the amounts you transfer — even if your unpaid debt originated from your business.

By opening another business balance transfer card and shifting the remaining outstanding balance to the new card, you’ll enjoy that 0 percent intro APR again. Remember, you won’t be able to transfer a balance between cards held by the same bank, so be prepared to go elsewhere for your new balance transfer card. Here are just two examples of how it can work for you:

PNC Visa Business Credit Card

The PNC Visa® Business Credit Card* offers a 0 percent introductory APR on balance transfers for 13 billing cycles on transfers made within 90 days of account opening. After that, the variable APR will increase to between 15.24 percent and 25.24 percent. The balance transfer fee is 3 percent (with a minimum of $5). Also note that balances must be transferred within 90 days of account opening to qualify, but to take full advantage of your zero interest period, you should transfer the balance as soon as possible.

U.S. Bank Business Platinum Card

The U.S. Bank Business Platinum Card* offers a 0 percent intro APR on balance transfers for your first 18 billing cycles. After that, the variable APR will increase to between 17.24 percent and 26.24 percent. The balance transfer fee is 3 percent (minimum $5).

It may seem beneficial to take the longest intro APR period you can get, but that’s not necessarily the best idea. You may not need that much time, and the rewards may be better on one card over the other (though neither of the above examples is a rewards card). So, research the offer that best serves you, not just for this circumstance, but also into the future.

If you choose to use a balance transfer card, be conscious of making your payments on time. If you’re late, the deal can expire prematurely, you risk triggering a penalty APR and you’ll have paid the transfer fee for nothing.

Can you use a personal card for business expenses?

You may have also noticed that there are many more consumer credit cards with introductory APR offers. While using a personal credit card for a balance transfer is always an option, it rarely makes sense to mingle personal and business expenses — even if you wind up getting a better deal.

Our advice is transferring business debt to business credit cards only and avoiding situations where you’re mingling business and personal funds. If, however, you can’t find a business card that meets your needs, it’s ok to use a personal card, but use it only for your business expenses so you can continue to keep business and personal accounts separate.

Make a plan for after the balance is repaid

It’s a good idea to get the best small business card for yourself and your company and to use it effectively. With a 0 percent APR card, plan ahead for the upcoming rate increase. Mark your calendar with the date it will rise and prepare to pay the balance off before it does.

Once the regular rate of interest goes into effect, keep revolving debt to a minimum. Paying the entire bill during the interest-free grace period is great because the 25 or 30-day loan will be free, but there’s nothing wrong with charging an expensive purchase and paying it off in a few installments. Yes, you’ll be charged financing fees, but they won’t be too much if you pay the balance off within a few months.

Should you keep a 0% APR card after the intro period ends?

Whether to keep your old credit card or close the account is entirely up to you, but it typically makes sense to keep old accounts open when there’s no annual fee. After all, keeping old cards open lets you maintain access to the line of credit in the case of an emergency.

Credit cards with intro APR offers may also offer other benefits you can use later on, whether you want to have access to purchase protection or extended warranties for larger purchases or your old business credit card came with built-in travel protections.

Keeping older accounts open can also help your personal or business credit score since both types of scores take the length of your credit history into account.

The bottom line

That zero-interest loan your business credit card grants you has conditions, like any other business loan. Take full advantage of those terms, but strategize your next move in advance. In short, when you realize your business credit card’s 0 percent introductory rate will soon adjust upward, don’t panic — plan!

*The information about the PNC Visa® Business Credit Card and U.S. Bank Business Platinum Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.