So, When Does Default Occur On Your Business Credit Cards

Category: Finance.

You will notice from the fine print( do read the fine print, as a responsible business credit card user) that the zero percent APR in business credit card offers apply only for specific time frames, generally six to twelve months, although there are business credit cards that offer up to 15 months.

This rate will then be added to the prime rate. After the expiry of the zero percent introductory APR, business credit card issuers will charge you an APR which they will determine, using as a basis their evaluation of your credit, the size of your credit limit, and a couple of other factors. Thus you will often see in your business credit card offers, that after the introductory period, the applicable rate on your business credit card transactions will be prime rate+ a certain APR. This zero percent APR during the introductory period will be applied to all purchases during the period and to balances from other business credit cards that you transfer to your new business credit card within the specified period. You will have to check your Business Credit Card agreement, which constitutes your final contract with the business credit card company regarding the business credit card issued to you. Take note of these specified periods always, because there may be variations.

Remember that balances transferred are covered by zero percent only during introductory period. In the variation that was mentioned above, instead of offering you the limited- period zero percent APR, some business credit cards offer a low percent APR( usually around 5 percent) which will be fixed until you shall have paid off the entire balance transferred from other business credit cards. If the balance remains unpaid at the expiry of the introductory period, they will be subject to the standard, higher APR. In addition, you must remember that you will also be charged a cash advance fee, usually a minimum$ 00, and that all cash advances are due immediately- that is, they are added to your usual minimum monthly payment due, and cannot be carried over into your next billing period. You already know that cash advances on your business credit card are subject to a higher APR than usual purchases. You must not forget that your default APR is much higher than cash advance APR. If you do not pay the minimum amount due on your business credit card in any two billing periods, you will be considered in default and immediately subject to the high default APR.

So, when does default occur on your business credit cards? You will be considered in serious default when the following conditions obtain: � Non- payment of minimum amount due in at least any three billing periods. � Non- payment of minimum amount due in two consecutive billing periods. � Any check payment is not honored by the depository bank. � Exceeding credit limit at least three times during the preceding 12 months. The moment you fail to pay any minimum amount due by the payment due date, the promotional or introductory APR will automatically terminate. This underlines the importance of promptly paying amounts due on your business credit cards. No more zero percent. Using your business credit card wisely also means managing your payments religiously.