Know the Effect of the CARD Act on Small Businesses When You Set Up an LLC
by: Jade Roberts
When you set up an LLC, you may have also opened a small business credit card. There has been a lot of talk about the CARD Act and the protections it will provide to millions of credit card holders. But, I was curious to know what type of impact the CARD Act would have on small business card holders. I’m sure you are well aware, under the Credit Card Accountability, Responsibility, and Disclosure Act (CARD), regulation prevents credit card companies from raising interest rates on existing balances, provides relief on over limit fees and sets consumer friendly rules on how your payments can be applied. Just to name a few of the highlights. Sounds great right? It is, if you are using a consumer credit card. The changes mandated February 22nd under CARD doesn’t cover small business credit cards. So does this mean you should not open a small business card when you set up an LLC? No, of course not. What I am suggesting is that you shop around. Recently, a few banks have stepped forward and announced that they will give small business card customers many of the same protections that consumer cards enjoy under Washington’s stricter regulation. Some critics have expressed concern that these moves will lead to less credit lending and higher interest rates. In the article that I read, a bank spokesperson felt this move would not impede the bank’s ability to make credit available to those small businesses that are credit worthy and if they have previously set up an LLC it can place them on more solid ground for the loan.
HOURS OF OPERATION
9:00a.m to 5:00p.m. CT
Monday - Friday
Let one of our specialists answer your questions!