What financing methods have you been using to grow your business and keep cash flowing during the recession? As the economy improves again, credit card issuers are hoping more small business owners will turn to credit cards as a cash management tool.
The Los Angeles Times recently reported that entrepreneurs can expect to see more credit card offers in their mailboxes in the coming months. Why? Because the 2009 legislation that reformed credit card policies put a lot of restrictions on the kinds of rates and penalties card issuers can charge consumers. Business credit cards, however, were excluded from many of these protections. That means card issuers can charge us higher interest rates and make a bigger profit.
But while card issuers are hoping to attract more small business owners, entrepreneurs are a bit gun-shy about taking on new credit cards. There are several reasons for this.
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The Federal Reserve has advised not adding consumer protections to small business credit cards, fearing that repercussions could hurt business owners.
A report by the Federal Reserve says that giving small business cards the same legislative protections currently in place for consumer credit cards would make them more difficult for entrepreneurs to use.
The report said that enacting the protections would actually be bad news for small business owners, because card issuers would be forced to deny more new credit card applications, raise interest rates and lower spending limits on existing cards.
The Federal Reserve says that credit card companies already pay more to maintain small business cards, and that loss rates on those cards are historically 20 to 30 percent higher.
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‘Credit Card’ is made of two words: credit and card. The word’card’ is absolutely self-explanatory while the word credit can mean different things.
The word credit was defined by the Webster’s Dictionary as’the power to obtain goods without immediate payment. How appropriate ЁC the use of the’word credit’ in the term’Credit Card.’ I guess it’s not the’obtain goods without immediate payment’ that’s appropriate but it’s more of the’power’ part. A credit card is a powerful thing ЁC it can give you an endless (well, there are some limitations but most often than not, the sky’s the limit) access to things ЁC movies, cars, flights, travels and a lot more. Indeed, my online chase credit card allowed me (including my friends and family) to enjoy a lot of things for free (ЁC or at least free for the moment?)!
In fact, when I received my credit card after accomplishing the surprisingly easy chase credit card application, I felt free. Fre Read more…