It is not uncommon today to see banks and other financial institutions trying to lure customers into applying for their business credit cards. With the CARD act tightening the noose in terms of revenue from personal credit cards, banks are now trying to market their business cards that are not tied down by the rules and regulations of CARD act. Over 640 million business card offers were emailed to customers between April and June this year which is an increase of 83% as compared to the same time last year.
Before applying for any offers that pop into your inbox, make sure it is not a business card. Though banks are willing to issue these cards even to people who do not run any business, you are in danger if you end up applying for it. Since it is not bound by the CARD act, the lenders have an upper hand. The interest rates on the card can be increased without prior notice just as it was on the personal cards a couple of years ago. The same holds true even in the case of annual fees and other charges on the card.
Many other terms and conditions on the card can also be changed at the bank’s discretion, putting the customer’s credit history in jeopardy. One of the surveys conducted by Pew Charitable Trusts has revealed that over 84% of the business credit cards use the payments made to clear off balances with lower APR first, thereby increasing the debt of the customers on balances that carry higher interest rates.
