Small Business Credit Cards You’ve heard of all the great new consumer protection rules the government is putting into place to help credit card holders stay safe from unfair business practices haven’t you? Depending on how you look at it, it could be good news or bad news; but the government, for your own good, wants to deny holders of small business credit cards all of those protections. That means that the bank will be able to raise interest rates without notice, change penalties and fees at a whim, and change terms whenever they feel like it.

Not that they need to make a big deal of it; these are fairly trivial allowances. Let’s look at what protections small-business credit card holders are denied now (protections that consumer card holders get ). To begin with, the credit card companies will recognize no upper limits to penalties and fees that they may apply to anything the cardholder does. And if there is a late payment involved, they will immediately and without notice charge higher rates and bring on harsher conditions.

Small Business Lending Just as the government fears, the credit card companies claim that should new consumer protections enshrined in the credit card act be made to apply to them, that they would be forced to slash credit lines to business owners. Businesses don’t run on steady incomes; their profits are seasonal; credit card companies feel that they need to price their business products for the increased risk involved in administering small business credit cards.

There is no real urgency anywhere in the government to help extend consumer protections to business users either. If as a small businessman you are tempted to co-opt your personal card for business use, you’ll need to drop the idea. It’ll be more difficult to maintain accounts for tax purposes, and you’ll miss out on business card benefits and supplier discounts. You’ll just have to be more careful with your accounting practices is all.