New credit card guidelines mandated by the Credit card Accountability and Responsibility and Disclosure Act of 2009 enacted robust customer protections. But the Card Act was written to give banking institutions a loophole through the guidelines with “professional cards”. Congress was certain to make professional cards exempt from late fee limits and rate of interest ambushes. The prospect of losing billions in the form of illegitimate fees has charge card companies scrambling to recruit unwitting customers for the professional cards also referred to as corporate cards or small business cards. Post resource – Credit card companies dodge rules by offering professional cards by Personal Money Store.
Card issuers finagle exemption from Card Act
Professional charge cards were formerly the trademark of entrepreneurs. Today business owners and company executives are the same as every person else on the mailing list. The Wall Street Journal reports that since the Card Act was passed in March 2009, charge card corporations have been pushing professional cards to people who don’t need them. Anybody with a mailing address began receiving applications for professional cards that give no indication they’re exempt from modern credit card rules. In the first quarter, professional charge card offers increased 256 percent from the same period the year before to 47 million, as outlined by the research firm Synovate.
Deception is the guideline for professional cards
Numerous people will still opt to hold a professional card. Becoming aware of the risks involved could be their only protection. To take as much of the customer’s money as possible, Credit Loan reports that card providers will apply payments over the minimum to the balance with the lowest APR. 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 is not required, which allows banks to shorten the window to make it harder for cardholders to pay on time. Interest rates can also rise substantially without notice for making a payment just one day late. Last, however certainly not least, terms governing interest rates, transaction fees, annual fees and penalty fees can go up on professional cards, and also the consumer won’t know until they get their next statement.
Heading off card companies on the pass
New charge card guidelines 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. How small businesses get dinged by charge card fraud is one of Sullivan’s examples . Most cardholders don’t realize that their liability protection 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 charge card businesses to bait consumers, Sullivan suggests that increasing the same safeguards within the Card Art to companies would benefit everyone.
Further reading
Wall Street Journal
wsj.com
Credit Loan
creditloan.com
MSNBC
redtape.msnbc.com
No comments:
Post a Comment