As a business owner, you know that managing your finances is a crucial part of your success. One way to manage your cash flow effectively is by using a company credit card with an interest-free period. An interest-free period can give you time to pay off your balance without incurring any interest charges.
In this blog, we’ll discuss strategies for making the most of your business credit card’s interest-free period.
What Is An Interest – Free Period On Company Credit Card?
A company credit card’s interest-free period generally spans from the billing cycle closing date to the company credit card statement due date. This allows a business owner sufficient time to pay off the card’s bill without any interest. Making it ideal for entrepreneurs to make big-ticket purchases that might have to be postponed because of insufficient money. With smart planning and budgeting, a business owner can maximize the cash flow every month.
Here’s how you can make the most of grace-free periods.
Strategies For Making The Most Out Of Company Credit Cards
Plan Monthly Credit Card Expenses
Planning your monthly business expenses and timing them appropriately can help you save on paying the interest costs. For instance, if your bill cycle is from the 6th of Nov to the 5th of Dec, try paying off your company credit card bill during the initial days post the bill due date.
This means, if you use your company credit card on the 5th of Dec, you will have a 50-day interest-free period before you pay back the spent amount. Making purchases in the middle of the month will only give you a few days of interest-free period.
Pay Off Your Outstanding Dues
To make the most out of your company credit card’s interest-free period, you must pay the due bill before or on the due date. If you have any dues pending, those dues will be carried forward to your next billing cycle and you will be also charged interest on the remaining amount.
The interest rate is charged from the transaction date to the repayment date. If the minimum amount due on the card is not paid before the due date then you can attract late fees based on the bill amount. Hence, to avoid paying interest, it is recommended that you consistently pay off your company credit card bills on time and refrain from carrying forward any balance to the following month.
Avoid Withdrawing Cash From Company Credit Card
Another strategy to make use of during your company credit card interest-free period is avoiding withdrawing cash using your company credit card. If you withdraw cash from an ATM using a business credit card, you attract certain charges. These charges are applicable from the period starting from the day of withdrawal until full repayment is made.
Cash withdrawals also attract advance charges as well based on the amount. Hence, it is always recommended to avoid cash withdrawals through credit cards.
Keep Track Of Your Spending
It’s essential to keep track of your spending on your company credit card. Set up alerts to notify of any charges, and regularly review the credit card statements to ensure that your spending aligns with the set budget.
This will help you avoid overspending and ensure that you have enough funds to pay off your balance before the interest-free period ends.
Conclusion
In conclusion, using a company credit card with an interest-free period can be an effective way for a business owner to manage their cash flow. By planning monthly expenses, paying off outstanding dues on time, avoiding cash withdrawals, and keeping track of spending, a business owner can make the most of their business credit card’s grace period. The mentioned strategies can help you save on interest costs and maximize cash flow every month.
Founderscard is an exclusive company credit card that offers an interest-free period of up to 51 days with a convert-to-EMI feature. The card is specially designed for founders to help them navigate through cash crunch easily. By using business credit cards efficiently, a business owner can always have enough cash flow to run a business effectively.
