To help small businesses better manage their budgets and cash flow, Office Depot Inc. recently began offering its existing and new business credit cardholders no interest charges for six months on purchases of $299 or more.
A representative from Office Depot was unable to comment by PaymentsSource deadline.
Office Depot developed the promotion to help enable small-business customers to invest in equipment and supplies. Some 72% of small-business owners believe credit card interest rates will increase this year, which may make them wary about using cards, Office Depot said in a Jan. 28. news release, citing its December small-business index.
Moreover, like many consumers, small businesses are not spending and charging as much, Christine Pratt, a senior analyst with Boston-based Aite Group LLC, tells PaymentsSource.
Office Depot most likely is hoping to lure more small-business customers, “and this deal is a good source of capital because business owners may purchase supplies and not have to worry about interest,” Pratt says.
Additionally, it enables Office Depot to have a “competitive advantage over other, similar retailers at a usual downtime for retail sales,” Pratt notes.
The offer began Jan.1 and runs through Feb. 26. The retailer will not charge interest if cardholders pay off their balances by the end the six months.
If cardholders make a purchase for $299, for example, they can save $32 in interest if they pay off the balance within six months, according to Office Depot.
Office Depot will apply interest to balances not paid off within six months. As of Jan. 25, the nonvariable annual purchase interest rate for the Office Depot proprietary business credit card ranged from 20.8% and 23.99%.
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