After examining policies at the 10 largest credit card issuers - including American Express, HSBC, Wells Fargo, Capital One and others - the report found that 80% of all business credit card policies hold the owner personally liable for the usage and debt accumulated.
Experts agree that this is quite alarming especially since new consumer protection laws were recently implemented under the Obama Administration's Credit Card Accountability Responsibility and Disclosure (CARD) Act.
The CARD Act is a bill that requires credit card terms to be more transparent and disallows shady fine print card practices, including excessive fees and interest-rate hikes.
Odysseas Papadimitriou, CEO of CardHub.com, offers the following advice: "Don't get confused by [marketing campaigns]...calling them business credit cards. Realize that you are held personally liable for these cards in the same way you are held liable for a personal credit card."
He continues, "Small-business cards are 'exactly consumer credit cards.' They're just calling them a different name."
He suggests that business owners who carry revolving debt use their personal credit cards to obtain protections. Credit card companies can, in theory, can raise interest rates on business card balances without much notice.
