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Wednesday
May182011

Business Credit Cards Could Jeopardize Your Personal Credit Rating

Stockbyte/Thinkstock(WASHINGTON) -- Users of business credit cards are increasingly being subjected to potentially deceptive and harmful practices by card issuers, according to a study by the Pew Charitable Trusts.

"The high volume of offers that are going out to U.S. households is placing people at risk, whether you are an individual employee who is trying to track your work-related expenses or whether you're a small business owner who is taking out an account for yourself and your employees," said Pew's Nick Bourke, director of Pew's Safe Credit Cards Project, in a statement.  "You're going to be personally liable for those expenses if you get a business credit card."

The non-profit consumer organization took a look at credit card issuers' practice of direct mail solicitation for business credit cards, which may come labeled for corporate, small business, or professional use.

Offers for business credit cards have skyrocketed after new protections went into effect in 2009 to protect consumer credit card users.  The Credit Card Accountability Responsibility and Disclosure Act, CARD for short, mandated consumer protections to combat harmful, unfair, and deceptive practices.

Pew researchers say the CARD Act does not extend to business credit cards, leaving many households at risk.

Consumers targeted for business credit card may be unaware of a card issuers' ability to change account terms in the first year, charge penalty fees for existing balances, and hold an individual liable for money owed.

To help consumers understand their financial responsibilities, Bourke says "credit card protections should be extended whenever there is a personal liability."

Copyright 2011 ABC News Radio

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