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Credit Card Applications » News » Other » New Business Credit Card

New Business Credit Card

October 20, 2008
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Small Business Cards Protected by the New Bill

Nearly 44% of small businesses admit they use credit cards as the major source of financing, more than any other type of a loan offered by the lending industry. But as their popularity grows, so do the interest rates and other terms specified in the agreement. The National Small Business Association expects a miracle to come after the Credit Cardholders' Bill of Rights Act gets its full force.

Strongly adhering to the laws of competitive market, NSBA is surprised at how card issuers violate the principles of healthy cooperation, playing their own rules that too often underestimate the value of their clients. NSBA claims that, unlike the major lenders, they never allow changing the terms of the service at any time and any reason. Today The National Small Business Association believes in and waits for the injection of fairness and competitive principals into the credit card industry.

In August, 2008, nearly 2/3 of all small business card owners confessed that their credit card terms changed for no evident reason. Well, this is only partly true because some mistakes like late payments were obviously committed.

Reminding you, the Credit Cardholders' Bill of Rights Act does allow card companies to continue with risk-pricing measures. But, prohibiting the predatory practice of hiking the rates on any current balance, the bill will still allow rising interest sky-high on 30-day late accounts.

The National Small Business Association blames the root of the problem, not its consequence. As they believe the unfair pricing is based on the wrong approach to risk assessment. Why should the issuer offer high limits and low APRs to people whose paying abilities were not properly estimated? The right risk assessment should be done before a new business card is issued and should rule out adjusting the terms after the cardholder makes a big debt. The debt then accumulates as the business owner may not have foreseen and so prepared for additional expenses to cover higher monthly payments.

New business credit cards are expected to be not so critical. The Credit Cardholders' Bill of Rights would get lenders to maintain the terms of the original agreement and restrict them from using petty mistakes like one day late as the ground for increasing the interest rates.

NSBA looks at the consequences of easy mortgage and credit cards which they think can substitute one for the other. Some people pay mortgages with plastic cards, while some are trying to get relief from the extortionate 30% interest rates through home equity loans or home equity lines of credit.

There should be a law taking out this mess out of the credit market. With the proper assessment who can and cannot be approved for a certain card application, not only businesses but ordinary consumers will get the fair set of card benefits and will manage their credit lines more efficiently and less risky.

As to small business card owners, they believe the favorable terms should apply as long as they follow the principles of wise financial decisions: making few applications within short period of time, using grace periods, paying bills online, restraining from cash advances and avoiding late payments.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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