Credit Card Applications Offers are Piling Up

Lack of Coverage

The primary problem is that cardholders of these professional cards do not receive the same type of protection and coverage as consumer credit cards under theCredit Card Accountability and Responsibility and Disclosure Act of 2009.

Some of the protections these cards do not include are:

• Interest rate increases
• Shortened payment cycles
• Inactivity fees

Taking Advantage

It appears as if business card issuers are taking advantage of the fact that consumers do not understand that the act protections do not extend to business credit cards. And, credit card issuers are taking advantage of this by inundating mailboxes with these offers. During the first quarter of 2010, 47 million professional credit card offers went out in the mail. According to the research firm Synovate, this is a 256% increase over the same type of offers that went out in 2009.

What to Do

It does not mean that you should not apply for one of these cards for your business. It simply means that you should be fully aware of the terms and conditions of the card before taking it on. This, of course, is true of any type of credit card or credit account that you open — be it personal or professional. It is also important that you understand that what you sign on for the business card may change over time, which are some of the restrictions that consumer credit cardholders do not necessarily have to worry about.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.