Are business credit card offers a good idea? Probably not. Beware of those credit card offers that look like small business cards and are anything but. There have been a slew of them in the past few months. I’ve received them myself. They look intriguing – lots of points for purchases but they have hidden fees and are not covered by the Credit Card Accountability and Responsibility and Disclosure Act of 2009 because they are “professional” cards.
The Wall Street Journal Weekend Investor, August 28, 2011, warns that: While the Credit Card Act bars issuers from raising rates on existing balances unless a cardholder is at least 60 days late with a payment, there isn’t any such prohibition on the Ink from Chase card. The card agreement says Chase is free to implement a default rate of 29.99% if a customer is late by just one day on a payment. And holders of Capital One Financial’s Business Platinum Card, meanwhile, can see their low introductory interest rates spike if they are just three days late with payment twice in a 12-month period, far less than the 60-day notice period required under the Card Act.
The are Personally Guaranteed
Even more distressing is the small business owner that applies for one of these credit cards without realizing that they are personally guaranteeing the card. So if the business goes under the owner will still owe on the credit. A close reading of the application indicates that rather than true business credit cards these are an attempt by the big banks to have the best of both worlds — Business card regulations with few restrictions and a personal guarantee to sweeten the pot.
Check out Jay Fleischman’s post where B is for Banking. He discusses the unbanked and how having an account makes your finances tidier.
More Bankruptcy B’s:
- Bad Faith Filing by Miami Attorney, Dorota Trzeciecka
- Bank Account by Daniel J. Winter, Chicago Attorney
- Bank Account Levies by New York Lawyer Lurie Favors
- Bank Account Levy by Philadelphia Lawyer, Raymond Kempinski
- Bank Statement by Westlake OH Attorney William Balena
- Bank Tips by Wisconsin Bankruptcy Lawyer, Bret Nason
- Bankruptcy by Taylor Michigan Lawyer, Christopher McAvoy
- Bankruptcy Abuse and Prevention Act of 2005 by Livonia Michigan Attorney, Peter Behrmann
- Bankruptcy Estate by Metro Richmond Consumer Attorney, Mitchell Goldstein
- Bankruptcy Mill by Chicago Bankruptcy Attorney, Kyle A. Lindsey
- Bankruptcy Petition Preparers by Los Angeles Law Monitor, Christine Wilton
- Bankruptcy Petition Preparers by Colorado Springs Attorney Bob Doig
- Bankruptcy Timeline by Pittsburgh Attorney Shawn N. Wright
- Bar Date by Ormond Beach Bankruptcy Attorney, Lewis Roberts
- Benefits of Chapter 13 by Vermont-New Hampshire Lawyer, Michelle Kainen
- Best Efforts Test by St. Louis, Missouri Attorney, Nancy Martin
- Best Interest of the Creditors by Honolulu Attorney, Stuart Ing
- Bifurcate by Tuscaloosa and Birmingham Lawyer, Melinda Murphy Dionne
- Bruce Wayne Bankrupt? Detroit Michigan lawyer Kurt OKeefe
- Budget by Birmingham Attorney, Elizabeth Johnson
- Business by Northern California Lawyer, Cathy Moran
- Business by Omaha and Lincoln, Nebraska Attorney, Ryan D. Caldwell
- Businesses and Business Debt by Newnan Georgia Lawyer, Rick Palmer
- Business & Individuals by Philadelphia Suburban Lawyer, Chris Carr
- Business Bankruptcy by Los Angeles Bankruptcy Blog, Mark J. Markus
- Buy Low and Sell High by Cleveland Area Lawyer, Bill Balena