Personal credit cards may have advantages for small businesses

A new report suggests changes from the CARD Act may make personal credit cards a better option for small business owners carrying credit debt than traditional business cards.

The CARD Act puts many restrictions on how banks can restructure rates on consumer cards; however, the new restrictions don’t make the same exceptions for businesses.

The new legislation restricts card companies from adjusting interest rates on existing balances and from applying penalty APRs for payments that are less than 60 days delinquent with consumer cards, Forbes reports. The report suggests personal cards may be a better option for employers because of the predictable interest rates.

Under the new laws, the report suggests there is no difference in the liability offered for personal cards and small businesses, because the responsibility for the credit debt often falls squarely on the business owner rather than a company, the news source says.

However, the report outlines some advantages to business cards, including superior tracking of purchases, the ability to assign credit cards with individual limits to employees and higher credit lines.