Congress passed legislation to protect cardholders from being treated unfairly by their credit card issuers but left one small but important detail out of the equation which has led some business owners being left out in the cold. Those who own a business credit card are not protected by the card act meaning they could still be a target for unfair credit card practices.
Since the economy has brightened up a bit since the recession, more and more small businesses have been turning to credit cards to help get them the things they need to grow. Reports say they around 80% of small businesses actually use these cards on a daily basis.
The fact that the Card Act does not protect businesses from sudden increases in interest rates is something that should definitely be taken into consideration when applying for a business credit card. Card companies can change the interest rates significantly and are only required to give a 45 day notice of the changes prior to them going into effect. This can significantly raise the amount of interest paid and the monthly payment amounts which has some business owners concerned.
So what can you do to protect yourself? First off, never open a business by going into debt to do it. Make sure you don’t need to rely soley on credit cards to keep things afloat and have a significant amount in savings to help cover any changes in interest rates that may creep up.
You may feel safer using a personal credit card for your business instead which guarantees your safety and protection against unfair credit card terms and can be all you need for your small business. We recommend using a cash back or rewards credit card.
Proposals are being considered to include business credit cards for protection but for the time being, it is better to be safe than sorry. Taking precautionary measures could save your hundreds of dollars or more in the long run.
As always, stay tuned to CreditCardsProfessor.com for more of the latest credit cards news, advice and the best credit card offers on the internet.
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