Are Banks Using Business Cards to Pay for Loss of Consumer Card Fees?
Posted: June 4th, 2011 | Author: Joe | Filed under: Banking, Credit | Tags: Banking, Business Credit Cards, CARD Act, Credit Card Accountability Responsibility and Disclosure Act, Credit Cards | No Comments »I’ve already chronicled the many “unintended” consequences of the CARD Act of 2009 that affect consumers, but it looks like there’s a new one that affects business owners.
Since the CARD Act eliminates many of the fees and interest payments banks traditionally use to offset other expenses and because the CARD Act only regulates consumer credit cards, banks are paying for other services like free checking and general business costs on the backs of business card holders.
That may not sound like a big deal to many, especially with the “business is the bad-guy” mentally that seems so prevalent over the past few years, but it’s not companies like GE we’re talking about – it’s largely small, independent businesses.
Many of these are people who have lost their full time jobs as employees and decided to make a go of it on their own.
The biggest concern for most business card holders is a hike in interest rates on existing balances. This could mean thousands in extra payments a year for anyone carrying a large balance. That’s significant for many home-based or startup businesses.
To make matters worse, some unscrupulous credit card issuers have begun marketing business cards to individual consumers:
“A study released Wednesday by the Pew Charitable Trust’s Safe Credit Card Project says that consumers are still vulnerable to these practices, because more than 10 million offers for business cards are sent to U.S. households each month.”
Consumers may not even be aware that the CARD Act doesn’t pertain to business cards. It looks like credit card rates and fees that were once difficult to maneuver have just become more so. Be careful out there people. 
