New federal laws don’t apply to business credit cards
While consumers all over the country will soon benefit from the rules put forth by the Credit Card Accountability, Responsibility and Disclosure Act, the same cannot be said of those that use business cards.
According to a new report from the consumer advice website Wallet Pop, business credit cards are excluded from the new protections in the Credit CARD Act. As a result, lenders are now radically changing how these cards work and are offered.
The report said that these accounts are still subject to interest rate changes on credit card debt with no warning and excessive penalties for the slightest misstep. In addition, lenders are now pushing these cards on small businesses more aggressively than ever as they try to make more money to make up for the shortfalls on consumer accounts. The number of small business offers mailed out in the second quarter was 14.5 million higher than the 26 million sent out in the previous three-month period.
The Credit CARD Act was designed by lawmakers to prevent lenders from preying on consumers, but the lack of protections for small businesses was often a point of criticism from advocacy groups.