Ginger Asks “I Started My Business On Credit Cards But It’s Hard to Make Payments”

Giner wrote in through the GetOutOfDebt.org site and asked for help.

I started a new business, had a few small credit card balances before, but had to use them, plus acquiring a few more, and with the balance trasfer deals, I now have 8 cards with a total debt of $50,000+. I manage to stay a float, my business has grown, but with the terrible interest rates, I pay out more in interest than principal even always paying more than the minimum due. I can’t get ahead.

I’ve asked card companies to reduce rates, even asked for managers, but can’t get them to reduce interest; what can I do?


I’ve certainly seen many business advisers that suggest turning towards credit cards to fund a small business. I’ve just never been that brave to do it. I’ve always been afraid of the resulting debt.

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The good news here is that your business is growing. The reality is that it is at a huge cost, the interest. Funding any kind of start-up on cards can be massively expensive and what you see now is simply the result.

If your credit is good you can look through the balance transfer deals here online and find one that works for you. You can then transfer your balances but you must keep your payments at the same or more than you are paying now.

When you do a low interest or 0% balance transfer the creditor will lower your minimum payment during that time so you are not actually paying off your debt. What they want to happen is for you to get to the end of the intro rate period and then jack your rates way up.

Alternatively, if you have some equity in your home, and good credit, you could look at a debt consolidation loan or refinancing some of your equity to pay off the cards.

Other options like debt settlement and debt management plans should be avoided right now in your situation. Let’s keep your good credit report and credit score good.

I’m not surprised that the lenders are not willing to make deals. While you are paying the minimums or just above the minimums you are the type of customer they want, a profit machine. You’ll pay and pay and pay but not make any progress towards actually reducing your debt.

I guess the last option is to continue to tread water right now and let your business grow more and hopefully fund your debt reduction in the future.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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