For more on credit, read the Credit Education Series.
Do you have debt piled on personal credit cards? Is your credit score suffering because of it?
If you have debt on a personal card, it can affect your credit score, because it lowers your credit/debt ratio (
read more). It can also be tough paying off your debt when you have very high interest rates, because you are always paying off your interest and not necessarily your actual debt.
As explained in the Credit Card Education series, one solution is to
open a business credit card, and transfer your debt to that card. It will help raise your credit score, because your debt won't show up on your credit report anymore. (Business credit cards don't show on your report). Even better is to get a business card with
0% APR promotion, and a low fee for the actual transfer. 0% APR means that you don't pay interest, say for the first 15 months. This gives you some time to pay off your debt, interest free.
Remember, anyone can open a business credit card, even if you don't have a 'business'. For this card, just choose '
Proprietorship', and you can use your name as your business name.
Recommended CardOne Business card that I recommend is the
Advanta Business Credit Card.
Benefits:
1. Being that its a business credit card, it
won't show up on your credit report (aside from the inquiry for applying for the card).
2. The most you will pay for the
balance transfer fee is $90, no matter how much money you are transferring. The minimum is $5 or 3%.
3. 0% APR for 15 months. You don't pay interest for 15 months, so you have time to pay off your debt.
4. It's not such a famous card, so it
won't affect your standing with the 'regular' credit cards from companies such as Chase, Citi, Amex etc. For instance, if you have a Chase Business credit card, even though it doesn't show up on your report, Chase will still know that you have the card, and that can affect your standing with Chase.
Last I heard from someone, Advanta did their inquiry by Experian.Personal CardIf you are looking for a personal card with a 0% APR, check out
this card from Citi/Associated Bank, it comes with 0% APR for 12 months, and there is
no charge for the balance transfer.
Related article:Some more 0% APR Credit Card offers