Credit card companies dodge rules by providing professional cards

Customers won a strong arranged of safeguards with the passing of the Charge card Accountability and Responsibility and Disclosure Act of 2009. But so-called “professional cards” aren’t covered by the Card Act. Congress was convinced for making professional cards exempt from late fee limits and interest rate ambushes. The prospect of losing billions within the form of illegitimate fees has credit card businesses scrambling to recruit unwitting customers for the professional cards also referred to as business cards or small business cards. Source for this article – Credit card companies dodge rules by offering professional cards by Personal Money Store.

New charge card rules stop short of corporate cards

Professional credit cards used to be reserved for small company owners or corporate executives. However charge card businesses broadened their efforts to include virtually any person, the Wall Street Journal reports, following the March 2009 passage of the Card Act. Any person with a mailing address started receiving applications for professional cards that give no indication they’re exempt from modern charge card rules. According to the research firm Synovate, 47 million professional charge card deals were mailed in the first quarter of 2010–a 256 percent increase from the exact same period the year before.

Professional cards set a hole for consumers

Customers applying for a corporate card need to familiarize themselves with the fine print. According to Credit Loan, credit card corporations 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. Professional charge cards don’t have to allow 21 days between the date a statement is mailed and also the date payment is due, making late payments, and overdue penalties, more likely. Payments one day late can trigger huge arbitrary rate of interest increases. Additionally, credit card businesses can change terms on a whim, and card holders won’t notice that their interest rate, transaction fees, annual fees and penalty fees have increased unless they bother to read the fine print on their statement.

Heading off card providers on the pass

New charge card rules don’t apply to professional cards because smaller businesses get shafted by Congress when it passes laws to protect customers, as outlined by Bob Sullivan at MSNBC. Sullivan deals the example of charge card fraud, and how small businesses are stuck with the consequences . Most cardholders don’t realize that their liability safety from credit card fraud comes at the expense of the business that makes the transaction with the lost or stolen card. Now that a different set of rules for professional cards is being exploited by credit card corporations to bait customers, Sullivan suggests that extending the very same safeguards in the Card Art to companies would benefit everybody.

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Wall Street Journal

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Credit Loan

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MSNBC

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