About Consumer Protection With Business Credit Cards

So you want to get a business credit card? That may be a good idea but, first, you have to understand the risks involved. This type of card is different from a personal credit card and may not offer you the same consumer protection you get with a personal one. Two things factor in before deciding to apply for a business credit card – the kind of business you have (is it a necessity for your business to run smoothly?) and can you do away with the consumer protection that you enjoy with your personal card if you opt for a business card?

What is consumer protection all about? Consumer protection refers to the protection that customers get by law. In 2009, legislation was passed that was known as the Credit Card Accountability, Responsibility and Disclosure Act, or CARD.

This law is in place to protect customers from rate increases on existing payments or to protect them from rate hikes when they miss a single payment. There are now guidelines that further protect the consumers from the practice of some companies to apply their payments to the balance with the lowest rate rather than to that with the higher rates. This is naturally more profitable for the unscrupulous companies.

The CARD Act is applicable only to personal credit accounts and not to commercial accounts. If you opt for the latter, you are taking much risk considering the big card spending habits business people do which run to the tens of thousands. Wrap your head around the idea that your business might be better off without a business credit card and that if it\’s an absolute necessity, you should first study everything that\’s involved in it. Business credit cards are not for the use of the regular consumers who may or may not have a business at the sides but it\’s unbelievable that credit card companies continue pushing business credit cards to regular consumers in order to avoid the CARD Act and to make more profit off non-suspecting people.

Consider how shrewd some credit card companies could be – they\’re selling not only to non-business owners but to retirees too! What those shrewd companies want is to avoid the new legislation even as they make more profits from their high rate charges on consumers. Schumer is working with the Federal Reserve Board to make sure that credit card companies list clearly on business applications that the cards are not meant for personal use. Business credit card offers through the mail are up more than 250% from the previous year\’s quarter however.

The consumer is protected on his/her personal accounts by such legislations like CARD. Their aim is to put the companies doing unfair practices out of the market. This type of protection dates all the way back to as early as 1968, with the Consumer Credit Protection Act. With protection measures varying from card to card, you should study the particular protection available to you on your card and not presume that they\’re all the same. Lastly, don\’t ever put your personal credit on your business card line to avoid any problems at tax time.

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