A lot of credit card customers have thoroughly been benefited from the CARD Act and the new reforms that have come into effect. However, when it comes to smaller businesses, the credit card has become a major problem and vulnerability. Many small business owners who own business cards such as the gasoline charge cards have been hit by higher fees and also quicker turnaround time on payment due dates. According to business owners, credit card companies have really made things difficult with some of them being hit by late fees for the first time because of the new changes that have come into effect. The credit card issuers on the other hand are using the new strategies with business card owners to make up for the loss of revenue with customer credit cards.
The late fee has been increased on business cards from 29 dollars to 50 dollars. The payments are also due 14 days now instead of 25 once the bill arrives. The due date cutoff time is 2 pm Eastern time. Thus business card owners are suffering from the new change in due dates and the time available to pay the bill payments. This is one of the biggest changes from the new Credit Card Accountability, Responsibility and Disclosure Act protections that came into effect this year.
The new reforms limit the late payment fees in most cases to 25 dollars and require the credit card issuers to send the bills at least 21 days before the payment is due. The payments from the credit card customers have to be accepted too until 5pm Eastern time on the date due. The reforms also include new rules like the one that prevents credit card issuers to increase the interest rates on new cards during the first 12 months. The advance warning period has to be increased as well before increasing rates on the existing cards.
However, most of these protections do not apply for the business cards. According to reports, although consumer card rates have largely remained flat since the new rules have come into effect. On the other hand the business card rates are soaring high. The fees which have been recently analyzed for 2300 small companies shows that small businesses aren't protected and moreover become a very easy target for the card rate hikes. According to the survey, the increase in interest rates has exceeded 30% since the beginning of this year. This is way high compared to the 16% of the consumer credit cards.