Best Business Credit Cards For Balance Transfers

What is a balance transfer business credit card?

Balance transfer business credit cards allow companies to move existing debt from one card to a new card, even if it’s from a different provider. It’s typical for these balance transfer credit cards to be 0% initially as a tool to attract new customers. For businesses, it means moving debt from a high-interest credit card to a new, potentially 0% card.

Unlike personal cards, business versions often have higher credit limits and are only for business expenses. Their reporting capabilities and software integrations make bookkeeping much simpler.

How it works

The new card provider pays off your existing debt for you. This can potentially consolidate business creditors into a single monthly payment. For SMEs struggling to meet liabilities, this can become a 1-2 year interest-free breathing space.

Best balance transfer business credit cards for UK SMEs

Currently, there are no balance transfer business credit cards available. While many personal credit cards are available for balance transfer, there are no business ones.

However, there are several business credit cards with long interest-free periods, which we list here.

Can I use a personal balance transfer card? Yes, if you are a sole trader, then it’s perfectly legal to use a personal balance transfer card, but you will be risking bookkeeping errors and a messy audit trail. If you’re a limited company, then this is not an option.

Alternative approaches for UK SMEs

A business loan is a common way to consolidate multiple debts, as this is one loan amount that can be used to immediately pay off those debts and credit lines, while repayments are fixed. However, this option will incur interest and will likely risk personal assets via a personal guarantee.

Another approach is to negotiate the existing terms with your current creditors. Here, you may be able to create a payment plan that is more in line with your capabilities, or benefit from a temporary rate reduction.

Pros & Cons of balance transfer credit cards for UK SMEs

Potential Benefits

Lower interest

0% introductory periods mean that you can focus on paying the principal rather than wasting money on interest payments. Plus, with inflation around 4% in the UK, the value of your debts reduces by 4% in real terms over a year. And, if your revenue has increased during this time, you may be in a better position to tackle the repayments.

Cash flow

Because of the reduced interest payments and prolonged interest-free period, your cash flow situation can improve as you escape the debt trap. While it’s still usually advised to chip away at repaying the credit balance, you have breathing space to also repay other high-interest loans.

Debt consolidation

Consolidating multiple card balances onto a single card reduces the likelihood of losing track and missing payments. It makes financial reporting and expense tracking easier too, and provides improved visibility over your financial health.

Rewards

Another consideration is that these business credit cards still have perks and rewards. This might come in the form of cashback and air miles, but it could also be discounts on software, airport lounge access, and insurance.

Potential drawbacks

Balance transfer fees

While the APR may be 0% for a period of time, it doesn’t mean it’s free. There is often a 2-4% balance transfer fee, which can offset a lot of the interest savings you otherwise make. So a 0% business balance transfer isn’t quite 0%.

High APRs

Because customers are drawn in for the introductory offer, the post-promotional rates can be less than competitive. Expect 20% APR or above, which risks a costly debt position if you cannot either clear the balance by that period, or make another balance transfer.

Eligibility Requirements

Business credit applications often require a strong credit profile and may even ask for personal guarantees.

How to choose the best business balance transfer credit card

• Transfer fee: Calculate the total cost of the transfer fee. For example, 3% on a £10,000 transfer is £300. Compare this against not just other balance transfer credit cards, but against the interest savings during the promotional period.
• Introductory interest rate & bonuses: The most important consideration is the length of the 0% period. For example, a 24-month period with a 2% higher transfer fee may still be a greater net saving.
• Revert APR: Be realistic about your chances of full repayment before the introductory period ends. An extraordinarily high APR could become a serious credit risk if the balance is significant.
• Credit limit: Business credit limits can start at around £5,000, but it depends on your credit history, trade history, and turnover. The larger the credit limit, the larger the potential savings.
• Rewards: Business cashback can vary, not just in rate, but also in whether it’s capped and the expense categories it applies to.
• Foreign fees: For frequent travellers, avoiding the typical 3% foreign exchange fee can make a significant difference to your savings.
• Accounting integrations: Many providers will integrate with major accounting software, but if you’re locked into one ecosystem, it’s worth checking how well it integrates.