With the passing of financial reform, a lot of people thought that they would be somewhat safer from the “fine print” that credit cards come with. However, they are sadly wrong. There are still a lot of loopholes that credit card companies are using to their advantage when it comes to getting and keeping customers.
The Big Credit Card Exception: Business Credit Cards
There was a big exception in the financial reform regulation that allows credit card companies to be exempt from the law if the card is for business or professional use. Some of the best credit cards for rewards are specifically tied to being a business or professional card because they know that businesses spend more. However, because it is a business card, some of the regulations, such as not raising your interest rates automatically, no longer apply. Furthermore, some of these cards only have a 15 day grace period! Really! Not to mention that most business cards also carry an annual fee!
The Trick
However, card companies are now marketing these cards to individuals. I recently had 3 credit card offers in the mail that were all for business cards. The reason is that credit card companies only expect you to apply if you are going to have a business, or you are a professional that needs the card. In the end they don’t particularly care, as long as you pay the bill, but the fine print on the application gets them around this law.
If you are getting an offer for a great rewards credit card, chances are it is for businesses or for professionals.
When you are considering getting a credit card, it is still essential that you take a little time to read the fine print. Yes, it sucks, but it will save you in the end should you have problems.
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
