|Small Business Credit Card-- Laws Do Not Apply|
Last May the Credit Card Accountability, Responsibility and Disclosure (CARD) Act was signed into law, containing a sweeping set of regulations designed to curb many unfair credit card issuer practices.
The CARD Act only applies to consumer credit cards. Small business card holders and future small business card holders will be working under the old set of rules.
There are more, but this gives small business owners an idea of how wide-ranging the new law is. Congress and the President did not include business credit cards in the law. It may be that the majority of complaints were coming from consumers, or perhaps Congress felt including business credit cards may confuse the issue. Whatever the reason, small business credit card holders are likely to continue playing by the old rules.
While on the surface this sounds bad, there may be a silver lining here. As the economy crumbled, small businesses were the most likely to have their credit limits slashed, or have their lines closed altogether. Small businesses were seen as too risky given the market conditions. Now, though little has changed with the economy, the new credit card law has card issuers scrambling to make up for lost profits. Where better to seek profitability than the customer segment that still falls under the old credit card rules–small businesses?
So, while small business owners may be angry that Congress didn’t address their needs when creating the new law, small business owners may be happily surprised to find their application for new business credit greeted by a much friendlier credit card industry in the future.