More consumers falling into business credit card debt traps
This week, Senator Charles Schumer once again made headlines when he asked the Federal Reserve to provide more protection for consumers against business card issuers. The Credit Card Accountability, Responsibility and Disclosure Act that went into full effect on August 22 does not affect business card companies.
The Associated Press reports that Schumer wrote a letter with the request to Federal Reserve Chairman Ben Bernanke. He cited a 256 percent increase in business card mail offers and notes that many consumers have been unwittingly opening accounts without having the full details of the agreement. In some cases, the AP reports that banks eliminated spaces for information about businesses on the applications given to customers.
“There’s a legitimate need for a separate type of card for small businesses,” Schumer told the AP. “But there is no excuse for selling those cards to consumers who don’t need them and don’t even know they’re buying them.”
Consumers looking to take out a credit card should read all terms and conditions prior to applying. Customers should ensure that they have the financial means to repay the debt in a timely manner to avoid credit score damage.