Banking experts say the Credit Card Accountability, Responsibility and Disclosure Act, which took effect earlier this year, could negatively impact small businesses.
Business credit cards were not included in the CARD Act, and, as a result business owners are paying rising interest rates and fees on their business credit cards while struggling to keep up with rising costs for accepting credit and debit cards, according to Small Business Trends. The fee businesses have to pay banks for each debit card transaction has increased substantially over the years.
Small businesses are also likely to soon be hit with even higher fees, rising interest rates and more confusing billing tactics.
“There is a whole revenue stream that has been shut off to credit card issuers…They may look to small businesses to make up that revenue ,” Molly Brogan, spokeswoman for the National Small Business Association in Washington, D.C., said, according to SMSmallBiz.
Some businesses credit card users might benefit from the CARD Act, however, because consistent billing periods and allocation of payments may apply to business and personal credit card users because it would be easier and more efficient to apply the same rule to all users, Nessa E. Feddis, the vice president and senior counsel for the American Bankers Association in Washington, D.C., told SMSmallBiz.