As the holiday season has come to an end, and businesses are going about in their usual manner, we have stepped into the New Year, but there has been nothing worthwhile that has happened with respect to the economy. Small businesses are still going through a rough time and business owners will have to take note of every possible way they can take advantage in trying to improve their businesses and make this year a bigger success economically compared to the last year.
There are many ways that one can improve their businesses and one way to do it is to use the right type of credit card to fund their small businesses. Until now, people have believed that the business spending must be charged on the small business credit cards due to some simple naming conventions. However, as per the new credit card laws, all of this are not exactly true.
There are certain protections which make the consumer credit cards a safer option. As per the new rules, consumers will have to be given a 60-day notice period by the issuers before imposing any increase in interest rates on the existing balances. These rules are not applicable to business credit cards.
The interest rates on business credit cards can be changed without notice to the customers, and the changes could also be applied to the existing balances although it might have been incurred at the previous lower rates. Hence, if the executive at the credit card company decides to hike the interest rates in order to increase the profits for the company, which is a common practice, there is little one can do as. At times such as these when the stability with cash flow and a consistent awareness of debts are so essential for small businesses, this could be a dangerous proposition. Since there are no rules against the use of personal credit cards for small businesses, one could use the personal cards especially if there are expenses that will result in having a balance by the end of the month.
Most small business owners have the misconception that the business credit cards provide better protection than the personal cards, and they think that liabilities like delinquencies and defaults will be assumed by the companies if they are on a business credit card.