According to the research made by Pew Safe Credit Cards Project, it has been seen that the new regulations have made consumer credit cards safer and more transparent in the recent months, but the same doesn’t hold true when it comes to getting business credit cards. The Credit CARD Act of 2009 (Credit Card Accountability Responsibility and Disclosure Act) has brought in few changes that has made consumer credit cards more protected for the credit card holders. In fact it has also been suggested that both credit card fees and interest rates have stabilized for those particular cards that are regulated within the term of the CARD act. Mismanaging your business credit cards may make you run into debt and you may have to seek help of credit card consolidation options to manage your debt.
However, the CARD act clauses does not apply for the business credit cards and thus the Pew report suggest that all the aforementioned protections are not applicable for those who use business credit cards. It has been studied that every year, more than 15 million business credit card offers are mailed to most households with varied income levels. The large numbers of offers that are usually sent to the American households represent the risk that they may face. Although some of the nation’s largest banks have voluntarily made their business credit cards more transparent so that this enables the users to feel free while using their cards. Though it’s unclear how many business credit cards are held by the individuals, but about 11 million small business credit card accounts with an average of 1.4 cards per account.
Some risks that you must consider – What the Safe Credit Card Project has to say
The researches made by Pew have analyzed some business credit card application disclosures that are provided by the business credit card offers during January, 2011. Some aspects of this study are:
*If you have a business credit card, you must be aware that 80% of such cards are subject to any time change in the clauses and terms of the card without even the chance to opt out from it. If the credit card is protected under the CARD Act, the card holder is supposed to receive 45 days notice and then can also opt out of them.
*Almost 68% of the business credit cards carry an over-the-limit fee. However, only 11% of credit cards issued by banks and covered under the CARD Act include over-the-limit fees.
*85% of business credit cards have some convenient terms included in them. They allow the card holder to repay the low-rate balance before they start paying off the high rate balance. However, this practice is not allowed by the cards regulated by the CARD Act.
*68% of credit cards carry hefty fees for late payments. Under the terms of the Credit Card Act, the consumer credit cards are well protected by some regulations against late fees.
*The Pew Safe Credit Card Project has offered a suggestion to safeguard business credit cards too in order to alleviate the level of personal risk involved. In order to protect the consumers in a better way and avoid running to business credit card consolidation options, the consumers must also reap the benefits of the Credit CARD Act.