As everyone applauds the protection offered by the Credit Cardholders Bill of Rights, there is one group that gets no benefit from these laws at all.  The LA Times reports:

“The new law, which shields consumers from predatory fees and sudden rate hikes, doesn’t include customers holding credit cards backed by their companies. An amendment that would have extended the protections to cardholders whose businesses have fewer than 50 employees was killed before the final bill was voted on.”

So the small business owner that has relied on lines of credits through business credit cards throughout the past 5 years or so is still going to be subject to the abuse of the credit card industry.  I haven’t been able to find the total amount of small business credit card debt.  However, I would imagine that it is sizeable.  Over the past 5 years, credit card companies were handing out small business credit cards like candy. You could get credit limits as high as $50,000 per card in most cases.  None of these credit cards would show up on a business owner’s credit report.  So, a small business owner could have an enormous amount of business credit card debt and it never be reflected on a credit score.  This of course enabled the small business owner to obtain more and more credit.

It makes no sense to exclude small business owners.  Leave it up to Congress to pass laws that do not protect everyone in the system.  It is not like the business debt (separate from the business owner) belongs to the company or small business. The business owner is personally responsible for that debt as he or she would be if it were personal debt. 

Then I came across this article in Inc.  that stated the following:

“….the National Federation of Independent Business, an advocacy group, supported the bill. Brad Close, the NFIB’s director of public policy in the House, said it was a straightforward piece of legislation to address the needs of entrepreneurs who use their personal credit cards for business.” 

That makes no sense at all since there is no distinction between a business credit card and a personal credit card.  How could this organization that is supposed to be the voice of small businesses ever think that this is a good thing?  Once again, it would be different if the business rather than the business owner was personally liable for the business card.  Besides, it makes no sense for a small business owner to use personal credit cards for business purposes when he or she can obtain a credit card in the small business name and the credit limit never be reflected on the credit report. 

For all of the politicians that voted to not protect small business owners, you have once again not done your job as an elected official.  The small business owner represents the backbone of capitalism which is probably the reason there is no protection.  It is a little disingenuous for the politicians to talk about helping the small business owner thrive when they don’t even have the backbone to stand up against the credit card companies and protect them.

Tags: Bob Brooks, business debt, Congress, credit, Credit Card Industry, Credit Cardholders Bill of Rights, credit report, Debt, Deceptive Money, LA Times, lines of credit, politicians, Prudent Money, small business credit card debt, small business owners