If you’ve downloaded our free ebook 20+ WAYS TO BUILD YOUR BUSINESS CREDIT EVEN IF YOU HAVE NO HISTORY.
Now here’s 3 tips on how to utilize your business credit cards and pull out cash for your business. There’s a lot more ways to do it which we teach all our clients once they get funded, but here are a few:
But first, the legal notice:
Important Disclosure: Please note that the techniques and ideas suggested here might not be applicable for every situation. Additionally, it is important that you realize that every lender, merchant service provider, and credit card issuer has different terms and condition. By sending you this document, Synergistic Investments, LLC is NOT suggesting that you violate any such terms and conditions. By reading this document, you agree to hold Synergistic Investments, LLC it’s associates, affiliates, directors, officers, employees, and any representative harmless from any claim or loss resulting from your actions without doing your due-diligence.
There are many ways to get your approved business credit lines into your bank account. The important thing is that you do it correctly to minimize the interest rate and transfer fees. Although each lender has different terms on their introductory rate, the concepts are very similar. We have provided you with a list of these introductory terms. IT IS IMPORTANT THAT YOU CALL THE LENDERS YOURSELF TO MAKE SURE THE TERMS HAVE NOT CHANGED. As much as we try to keep up, we may not have the most updated list of introductory offers. Either the lender offers a 0% introductory rate on purchases, balance transfers, or both.
So let’s get started!
This is probably the simplest way to move a balance and take advantage of your new credit lines with a low intro rate on BALANCE TRANSFERS. DO NOT use this method for cards that offer an intro rate only on purchases. You simply use the new card, which often comes with a lower intro rate, to pay down or pay off the balance on an old credit card. It’s pretty simple and basic. Don’t forget the interest rate after the intro offer expires, the fee, and the length of the intro rate on the balance transfer. The best offers are available for 6-12 months with little or no fees…however, there are other variables to consider that make some shorter term offers just as good or a close second to the longer term offers. Do not make the mistake of thinking that all intro offers are created equal…and not even all 0% offers are created equal.
Here are the steps you need to take:
Call the customer service department of the new credit card that is offering you the introductory rate. The phone number can be found on the back of the card.
Let the representative know you would like to initiate a balance transfer.
You will need to provide the representative with the following information:
This is probably the cleanest and easiest way to turn a BT into cash because you just write yourself a check and cash it. You may have to call the lender to request these checks. Not all lenders offer this option. Some lenders will only offer this option to accounts that have seasoned for 6-12 months. Just make sure that the checks you use are considered BT checks and not just cash advance checks so that you know what fees and rates they will turn into. I’ve seen many people do this and think they were getting 0% BT’s when, in fact, they were really being charged a much higher fee and percentage because the transaction was actually a cash advance.
Important Note: If you intend to do a traditional BT to pay off more than one credit card I still recommend this method so that you can get access to all the cash in one transaction and you only pay the BT fees once rather than multiple times. Also, always remember to leave yourself a small $300-500 cushion (including any BT fees) between the amount of the BT and the available credit limit. We recommend you leave a $500 cushion and I know there will be no problems and the transaction will not get denied.
Here’s how to request balance transfer checks:
Call the customer service department of the new credit.
Ask the representative if they can send out balance transfer checks
This is a good one and it’s very effective but make sure you execute it correctly. Start by using a credit card with a low balance (preferably a zero balance) and take a cash advance on that card that is equal to the amount of cash you wish to access. Then, simply transfer that balance to your new card with the lower introductory BT offer.
Example: I want to access a 0% offer on a new credit card with a $20,000 credit limit.
Card #1 has a zero balance and I use this card to do a $19,000 cash advance and I put the cash in my bank account (preferably my high yield savings account)…but what if the rate is really high??? That’s ok; we don’t really care because it won’t be there long.
Card #2 – This is the new card with the 0% introductory offer. Now that you owe $19,000 to card #1 it’s time to pay them off with the 0% balance transfer offered by card #2 so do the BT to pay off that high interest card #1 with the $19,000 balance.
End Result: Your $19,000 is cash in hand (or in the high yield savings account where it can make a little interest income for you) and that balance is on the card with the 0% offer while card #1 is back to a zero balance. You only paid the high interest rate on card #1 for a few days or maybe 1-2 weeks at most. In fact, if the rate is high, you’re going to likely pay only $5-10 per day in interest while waiting for the BT to post.
Important Note: A couple important notes here…
Remember that the interest rate on the cash advance card is almost irrelevant because the balance is only on that card for a very short time. You should be more concerned with the cash advance fees that are charged to you at the time of the cash advance…try to use the card with the lowest fee possible – in most cases (not all) you will pay a fee for the cash advance and the BT…but don’t get too worried…if you pay a 3% fee for the cash advance AND a 3% fee for the BT and get 0% on the balance for 12 months this is really a 6% annual cost to borrow in year one. In most cases, if you are a client of ours, you will do better than this on one or both ends of the transaction. Is 6% a year a good interest rate? Try convincing a private lender, angel investor, venture capitalist or hard money lender to let you pay them a 6% annual ROI inclusive of their fees. If you can do that please let me know because I have a high paying job for you!
Here’s how to execute this strategy:
Go to the bank that holds your business checking account.
Ask the teller to do a cash advance from card #1 from the example above. You will need to bring card #1 with you to the bank.
Call the issuer of card #2 and request a balance transfer to card #1.