Small businesses lose protection under new credit card bill on clarkhoward.com

Sometimes it seems as if nobody cares about small business people and entrepreneurs. Here's yet another example.

Under the new credit card law, small business owners are left completely exposed to all the old policies that individuals are now being protected from.

Small business owners using business credit cards will still be subject to sudden interest rate hikes, retroactive rate increases, shorter billing cycles and more.

And remember, when you apply for a business credit card, you sign for personal liability. That means you're still personally responsible for charges even if your business fails.

So Clark has a very simple workaround for you: Just use a personal credit card for your business expenses. As a business owner using a personal card, you still come under the protection of the new credit card rules.

Need another reason to switch from a business card to a personal credit card? If you lose a personal card, your maximum liability is capped at $50. But with a business card, your liability could potentially be unlimited under the Uniform Commercial Code!

What others are saying

Business Credit Cards vs. personal credit cards
So - if we use our personal credit card for business purposes, should we close our business credit card account or just store the card?
By Leslie @ 09/25/09 02:02:08 PMreport abuse
Costco AMEX Business Credit Card
Clark's recent discussion about personal liability on business credit cards scared me! So I've checked with AMEX and Costco re' the Costco AMEX business card. The answer I got was consistent: If the card is lost or stolen, the card holder is NOT liable for unauthorized charges.

I would hate to cancel this card - it's terrific, especially the cash rebate, which includes 4% cash back on gasoline purchases!
By Walt K @ 09/11/09 01:41:23 PMreport abuse
$50 liability limit for Amex cards
Unfortunately, I suspect Clark is wrong on this one. I must be crazy because I read the mice type and my Amex business card agreement has a $50 liability limit for "unauthorized charges" - this means according to the definitions in the agreement charges that I or people I authorize to use the card are my liability but fraud and theft are subject to the $50 limit. It requires that I notify Amex within two days of discovering the unauthorized charge. Seems reasonable to me. The agreement ALSO provides as Clark noted that the Company, the main cardholder (me) are financially responsible. It allows Amex to go after any authorized users as well. This doesnt seem so reasonable to me but it is what it is. So Clark, you got that part right.
By Chuck @ 06/16/09 02:32:44 PMreport abuse
Small Business Credit
It's not so much what the CC Companies do as it is how they do it. As one of the post below asks "so I guess lenders can never again deceide who they can lend money to" That's not the point, of course they should be able to lend or not to lend, but, it's how the bankers are going about it.

The whole purpose of the initial bailout was to prevent a "freezeing up"of the credit markets. What did the banker do? They just kept the money (remember it's the tax payers money in the first place) The banks are just compounding the entire problem (just like depression I)

So while I'm ususally not in favor of Government Intervention, the banks have just gone to far. Remember, our money is create out of debt in the first place. Small business needs access to short term credit, if the rug is just pulled out from under them, it's just going to sink otherwise stable business.

It's the same thing with credit line reductions, you could pay your CC bill off every month, if the bankers come in and reduces your line of credit for whatever reason, then your FICO score goes down through no fault of your own and you can't get any additional credit lets say for an auto or home loan (re-fi) The whole thing is like the domonio theory. Knock over one domonio and the whole thing comes down.

Better regulate the bankers before they bankrupt the entire country. They asked for it with going to Washington for the bailout and then not putting the money back into the economy. Most of these guys should be up on racketeering and fraud charges anyway.
By John @ 05/28/09 07:23:04 AMreport abuse
Bus card perks
I have a AmEx card for my small business. Is the unlimited liability something new? It is hard to tell form the message above. Does anyone know if the credit card companies will voluntarily limit the liability?
By A. Lynn @ 05/27/09 05:47:32 PMreport abuse
advanta
We also received the Advanta letter. All of our business transactions are on this card. Thanks for the advance 2 DAY notice!
By sheree @ 05/27/09 03:38:25 PMreport abuse
ADVANTA BUSINESS CREDIT CARD
I received my Advanta letter today, 5/27 stating our cards are good for use through 5/29. So what's up with a two day notice??
By Diane @ 05/27/09 01:13:52 PMreport abuse
G. Money, get a personal card...
Get a personal card and use it for your purchases, and have your company reimburse you, but don't let others use it. You are protected with a personal card against theft and fraud, but you PERSONALLY are responsible for use by your employees if you give them the card.
By ThatGuy @ 05/27/09 09:06:31 AMreport abuse
Action to take?
I have an AmEx/Costco-membership small business card that I use frequently and has good perks. The loss/stolen liability seems dangerous or, at very least, imprudent. Is there any action I can take to keep the care and avoid the loss/stolen liability?
By G. Money @ 05/27/09 08:40:37 AMreport abuse
Government Housing
This is insane how much money these credit card companies are robbing Americans of. When will Obama and Reid finally get the government take over the credit card companies to ensure all Americans can finally live the good life? 3 more years to do it....fingers crossed.
By Socialist Sam @ 05/26/09 11:12:16 PMreport abuse
so what
so i guess a lender can never decide who they want to lend money to in the future. just because you have an open loan with a lender means they must continue to extend you new credit in the future? grow up.
By brian @ 05/26/09 09:49:14 PMreport abuse
Advanta closes all business card accts
I received a letter from Advanta today, May 26th stating that it is closing all business credit card accounts four days from today, May 30th. Four day notice is apparently legal.
By Don Page @ 05/26/09 07:55:57 PMreport abuse

Business Credit Cards vs. personal credit cards

So - if we use our personal credit card for business purposes, should we close our business credit card account or just store the card?

By Leslie @ 09/25/09 02:02:08 PMreport abuse

Costco AMEX Business Credit Card

Clark's recent discussion about personal liability on business credit cards scared me! So I've checked with AMEX and Costco re' the Costco AMEX business card. The answer I got was consistent: If the card is lost or stolen, the card holder is NOT liable for unauthorized charges.

I would hate to cancel this card - it's terrific, especially the cash rebate, which includes 4% cash back on gasoline purchases!

By Walt K @ 09/11/09 01:41:23 PMreport abuse

$50 liability limit for Amex cards

Unfortunately, I suspect Clark is wrong on this one. I must be crazy because I read the mice type and my Amex business card agreement has a $50 liability limit for "unauthorized charges" - this means according to the definitions in the agreement charges that I or people I authorize to use the card are my liability but fraud and theft are subject to the $50 limit. It requires that I notify Amex within two days of discovering the unauthorized charge. Seems reasonable to me. The agreement ALSO provides as Clark noted that the Company, the main cardholder (me) are financially responsible. It allows Amex to go after any authorized users as well. This doesnt seem so reasonable to me but it is what it is. So Clark, you got that part right.

By Chuck @ 06/16/09 02:32:44 PMreport abuse

Small Business Credit

It's not so much what the CC Companies do as it is how they do it. As one of the post below asks "so I guess lenders can never again deceide who they can lend money to" That's not the point, of course they should be able to lend or not to lend, but, it's how the bankers are going about it.

The whole purpose of the initial bailout was to prevent a "freezeing up"of the credit markets. What did the banker do? They just kept the money (remember it's the tax payers money in the first place) The banks are just compounding the entire problem (just like depression I)

So while I'm ususally not in favor of Government Intervention, the banks have just gone to far. Remember, our money is create out of debt in the first place. Small business needs access to short term credit, if the rug is just pulled out from under them, it's just going to sink otherwise stable business.

It's the same thing with credit line reductions, you could pay your CC bill off every month, if the bankers come in and reduces your line of credit for whatever reason, then your FICO score goes down through no fault of your own and you can't get any additional credit lets say for an auto or home loan (re-fi) The whole thing is like the domonio theory. Knock over one domonio and the whole thing comes down.

Better regulate the bankers before they bankrupt the entire country. They asked for it with going to Washington for the bailout and then not putting the money back into the economy. Most of these guys should be up on racketeering and fraud charges anyway.

By John @ 05/28/09 07:23:04 AMreport abuse

Bus card perks

I have a AmEx card for my small business. Is the unlimited liability something new? It is hard to tell form the message above. Does anyone know if the credit card companies will voluntarily limit the liability?

By A. Lynn @ 05/27/09 05:47:32 PMreport abuse

advanta

We also received the Advanta letter. All of our business transactions are on this card. Thanks for the advance 2 DAY notice!

By sheree @ 05/27/09 03:38:25 PMreport abuse

ADVANTA BUSINESS CREDIT CARD

I received my Advanta letter today, 5/27 stating our cards are good for use through 5/29. So what's up with a two day notice??

By Diane @ 05/27/09 01:13:52 PMreport abuse

G. Money, get a personal card...

Get a personal card and use it for your purchases, and have your company reimburse you, but don't let others use it. You are protected with a personal card against theft and fraud, but you PERSONALLY are responsible for use by your employees if you give them the card.

By ThatGuy @ 05/27/09 09:06:31 AMreport abuse

Action to take?

I have an AmEx/Costco-membership small business card that I use frequently and has good perks. The loss/stolen liability seems dangerous or, at very least, imprudent. Is there any action I can take to keep the care and avoid the loss/stolen liability?

By G. Money @ 05/27/09 08:40:37 AMreport abuse

Government Housing

This is insane how much money these credit card companies are robbing Americans of. When will Obama and Reid finally get the government take over the credit card companies to ensure all Americans can finally live the good life? 3 more years to do it....fingers crossed.

By Socialist Sam @ 05/26/09 11:12:16 PMreport abuse

so what

so i guess a lender can never decide who they want to lend money to in the future. just because you have an open loan with a lender means they must continue to extend you new credit in the future? grow up.

By brian @ 05/26/09 09:49:14 PMreport abuse

Advanta closes all business card accts

I received a letter from Advanta today, May 26th stating that it is closing all business credit card accounts four days from today, May 30th. Four day notice is apparently legal.

By Don Page @ 05/26/09 07:55:57 PMreport abuse

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May 26, 2009 -- Small businesses lose protection under new credit card bill

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