Credit card companies are returning to small business borrowers with new rewards programs and card offers. The trend is reflective of gradually improving sentiment among small business owners, particularly in regards to debt financing and credit decisions
According to the National Federation of Independent Business, nearly half of all small business owners carry some kind of credit card balance. However, these borrowers should understand that protective measures outlined in the 2009 Credit CARD Act are only extended to consumer credit cards - not those offered to businesses. "Critics say lenders are turning to small business cards because they have fewer consumer protections," writes Annamaria Andriotis for The Wall Street Journal. "On consumer cards, issuers can't raise that interest rate on existing balances unless the cardholder is at least 60 days late with a payment." But according to CardHub.com chief executive Odysseas Papadimitriou, issuers can change rates on small business cards whenever they'd like. It's also important for business owners to weigh how a card will impact their credit score. In almost all cases, the business owner is personally liable for debts, as opposed to the business' legal entity.