Customer safeguards incorporated in the Credit card Accountability and Responsibility and Disclosure Act of 2009 address a long list of sleazy tactics. But so-called “professional cards” aren’t covered by the Card Act. Congress was confident to make professional cards exempt from late fee limits and rate of interest ambushes. With billions of dollars in late fees and interest payments at stake, charge card businesses try to convince ordinary customers that they need a professional charge card, small business credit card, or business charge card.
New charge card guidelines stop short of business cards
The primary target for professional charge cards used to be business owners and business types. But credit card corporations broadened their efforts to include virtually anyone, the Wall Street Journal reports, following the March 2009 passage of the Card Act. In an effort to dodge the consumer protections provided by new credit card rules, charge card corporations are swamping ordinary customers with credit card applications. In the first quarter, professional charge card deals increased 256 percent from the exact same period the year before to 47 million, as outlined by the research firm Synovate.
Professional cards arranged a trap for consumers
Consumers applying for a corporate card need to familiarize themselves with the fine print. As outlined by Credit Loan, credit card businesses will always apply payments to the account with the lowest interest rate. Until the lower interest balances are paid off, the higher rate balances continue to accumulate interest. Allowing 21 days from when a statement is postmarked and also the payment is due isn’t required, which allows banks to shorten the window to make it harder for cardholders to pay on time. Professional card interest rates can also rise with no warning. Credit card corporations will utilize payments a mere one day late as an excuse for huge rate hikes. Last, but certainly not least, terms governing interest rates, transaction fees, annual fees and penalty fees can go up on professional cards, and also the consumer will not know until they get their next statement.
Closing the professional card loophole
The Card Act bypassed professional cards since the price for consumer protection is paid by small company when Congress is part of the equation. Sullivan deals the example of credit card fraud, and how small businesses are stuck with the consequences . Most customers who enjoy strong liability protection from charge card fraud aren’t aware that companies accepting credit cards are often left holding the bag when criminals use stolen cards. Now that a different set of rules for professional cards is being exploited by charge card companies to bait customers, Sullivan suggests that increasing the exact same safeguards in the Card Art to businesses would benefit everybody.
Further reading
Wall Street Journal
wsj.com
Credit Loan
creditloan.com
MSNBC
redtape.msnbc.com
No comments:
Post a Comment