05/18/2011 - Each month, Americans get more than 10 million business credit card pitches in their home mailboxes. The cards are aimed at small businesses and sole proprietors, but they generally lack the new protections that apply to consumer cards, a new report from the Pew Charitable Trusts says.
That means holders of the cards are subject to a host of potentially harmful terms, like high-interest penalty rates imposed without warning. The Card Act of 2009 banned such practices for cards marketed primarily as consumer accounts, but it doesn’t apply to those labeled for “business” use — even though the holders are individually liable for the account balances, just as “ordinary” consumers are. The impact of higher rates can be significant with a business card because the small business owner usually is responsible for charges on any card linked to the account.
Nick Bourke, director of Pew’s Safe Credit Cards Project and the main author of the report, says in a video that Pew “is urging policy makers to extend the protections of the Credit Card Act whenever a credit card account can hold a person individually liable.”
Read the full article Extending Credit Card Protections to Small Business Users on The New York Times' Web site.
Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.