Business Credit Card Debt Relief: Reduce Corporate Card Debt

Business Credit Card Debt Crisis

Business credit cards are one of the most common forms of business debt, and they're also one of the easiest to accumulate. With high interest rates (often 18-25% APR) and easy access to credit, business credit card debt can quickly spiral out of control.

The good news is that business credit card debt is often easier to settle than other types of business debt.

Business Credit Card Settlement

Credit card companies regularly settle business credit card debt for 40-60% of the balance. They know that if you file bankruptcy, they'll likely receive nothing.

Settlement works best when you're behind on payments and can offer a lump sum. Credit card companies are often willing to accept significant reductions to close the account and move on.

Settlement Strategies

Effective business credit card settlement follows a specific approach.

• Stop making payments to create leverage (risky but effective)
• Wait for the account to be charged off (typically 180 days)
• Negotiate with the collection department or debt buyer
• Offer 30-40% of the balance as a lump sum settlement
• Get the settlement agreement in writing before paying
• Ensure the account will be reported as 'settled' not 'charged off'
• Keep records of all settlement communications

Alternatives to Settlement

If you want to avoid the credit damage of settlement, consider these alternatives: balance transfer to a lower-rate card, debt consolidation loan, payment plan with reduced interest, credit counseling and debt management plan, or refinancing with a term loan. Each option has pros and cons depending on your situation.

Multiple Card Strategy

If you have multiple business credit cards, prioritize settlement of the highest-interest cards first, negotiate all cards simultaneously for maximum leverage, and consider which cards you might want to keep open. Some business owners settle most cards while keeping one open for emergencies.