How Repayments Work for Your Business Charge Card

Types of Repayments

There are two primary ways to make a repayment:

• Book Payments: These payments instantly decrease your credit account balance and immediately increase your available credit limit.

  • Example: You have a balance of $5,000 and a credit limit of $10,000. You make a book payment of $2,000. Immediately, your new balance is $3,000, and your available credit limit increases to $7,000.

• ACH Debits: For these payments, your balance and available credit limit are updated only after the ACH debit clearing period is complete (typically a few business days).

  • Example: You have a balance of $5,000 and a credit limit of $10,000. You initiate an ACH repayment of $2,000. Your balance remains $5,000 and your available credit limit remains $5,000 until the ACH debit has cleared. After it clears, your new balance will be $3,000, and your available credit limit will be $7,000.

Repayment Options

You have flexibility in how you make repayments:

• One-time Repayments: You can make a one-time payment for all or part of your balance at any time, even before the due date.

  • Example: Your billing cycle ends on the 30th of the month, but you want to pay off a recent $500 purchase on the 15th. You can make a one-time repayment for that amount.

• Automatic Repayments: You may also be able to set up automatic repayments to cover your previous balance. This functionality, however, cannot include purchases made in the current billing cycle.

  • Example: Your previous month's balance was $1,500. You have automatic repayments set up for this amount. The system will automatically initiate a repayment for the $1,500 balance, but it will not include any purchases you made in the current month.

Handling Late or Returned Payments

In the event of a late or returned payment, here is what you need to know:

• Late Repayments: If a payment is late, the associated cards may be frozen to prevent further spending. With bank approval, late fees can also be assessed. If a late balance isn't paid after three ACH debit attempts within 180 days of the purchase date, the credit account may be closed.

  • Example: Your payment is due on the 10th of the month. If it is not received, the card could be frozen, and after 180 days of unsuccessful payment attempts, the account may be closed.

• Returned ACH Repayments: If an ACH repayment is returned before it posts, your balance and available credit limit remain unchanged. If it is returned after posting, your balance will increase by the returned amount, which may cause your account to go over its credit limit.

  • Example: An ACH payment of $500 is returned after it has already posted to your account. Your balance will increase by $500. If your balance was $100 and your credit limit was $500, this returned payment would make your balance $600, putting you over your limit.

To learn more, visit: https://www.unit.co/docs/business-charge-cards/#repayments