Last month, I applied for 2 credit cards for my business. My aim was to use the cards to transfer the balance on the business credit card that I’ve had for years. The balance on the business credit card was around $22,000 and the interest rate was ridiculous (over 22%). My monthly payments of $1,000 weren’t going very far. Out of the $1,00) payment, $493 of it was going toward the finance charge.
I thought that both of the cards I applied for had a 0% interest rate. I was wrong. Both had a 0% interest rate, but I later found out that with one of the cards the introductory rate didn’t apply to balance transfers. The balance transfer was my sole purpose for applying for the card! So I needed another solution.
I thought that both of the cards I applied for had a 0% interest rate. I was wrong.
~ Single girl
I found a company that offers unsecured business loans through Lending Club. Though the rate isn’t 0%, it is still less than half of what the rate on the business card previously was. And, though there’s a loan fee, when I consider how much I was paying in finance charges every month, I’m still saving money. Even when accounting for the loan fee, I should be saving about $100 a month on this portion of the balance of the credit card (approximately $11,800). I’ve already transferred $10,000 of the business card balance to the 0% interest card, so I’ll be saving about $250 per month on that portion of the balance. In total, I’m coming out ahead at roughly $350 per month.
Here are the terms of the business loan:
- Loan Amount: $12,000
- Loan Fee: $718.80
- Interest Rate: $9.9%
- Term: 24 payments of $554
The plan is to be really aggressive in paying off both the 0% card balance as well as the business loan. Though I’ve been paying $1,000 per month on the card, I’d like to increase that amount to $2,000 per month. After all, the purpose of making these money moves is so that my payments can make a bigger dent in the balances, not so that I can prolong the payoff period. If I can get both of them paid off by the end of this year, I’d be DELIGHTED!
My goal is to be financially responsible and fiscally savvy when it comes to both the business and my personal finances. An aggressive plan to pay off the business’ debt is a good step in that direction.