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What to know about business credit card debt

On Behalf of | Nov 28, 2018 | Credit Card Debt

For business owners in Oregon and throughout America, credit cards make it possible to stay liquid. They can also provide a company with the capital it needs without having to ask for a traditional business loan. However, if a business isn’t generating enough revenue, it can be difficult to pay down the balances accrued on those cards. In some cases, it is difficult to keep up with the minimum monthly payments.

When this happens, a business owner may not be able to grow his or her business as fast or handle emergencies such as a customer cancelling an order. In some cases, business owners may not see their personal credit scores impacted by high business credit card balances. This is because these creditors don’t report to anyone’s personal account. Therefore, it might be possible to take out a personal loan or other type of loan based on a personal credit score.

Missing any type of credit card payment may trigger a penalty rate as high as 29.99 percent. A default could be noted on a personal credit report even if the card was used for business purposes. Those struggling to repay credit card debt may benefit from a balance transfer or by cutting expenses within the business itself. It may also be worth looking into a business debt settlement.

Whether a debt is personal or related to a business activity, it may still have an impact on a person’s overall finances. Therefore, it is generally in a person’s best interest to resolve the debt problem in a timely manner. This may be done by filing for bankruptcy if no other options are available. Potential benefits of bankruptcy include an automatic stay of creditor contact as well as the ability to keep some personal property.

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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 23 years.