Pew study reveals business credit cards still lack transparency

Using a business credit card could open you up to some of the problems that were addressed by the passage of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. Although the CARD Act created more transparency for consumers who take advantage of credit card offers, business cardholders may still be subject to harmful practices such as unpredictable pricing, according to a report from the Pew Charitable Trusts.

Among the harmful practices, banks and other credit card lenders can change the terms of business credit card agreements at any time, including rate changes. The CARD Act does not allow consumer credit card terms to be changed during the first year, and after that, cardholders must be given 45 days notice. Penalty rates on business cards can be applied immediately, while consumer cards don’t allow penalty rates to kick in until an account is 60 days past due. There also is no restriction on penalty fees for business cards.

People who use business credit cards that are not transparent about terms and conditions may run a huge financial risk because they are personally liable for the expenses. American households receive about 10 million business credit card offers each month, most of which have terms that would be illegal for consumer credit cards, according to Pew.

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