Credit Card Financing by Small Businesses Gets Crunched

Lower limits and higher interest rates pose problems for some small-business owners

By Matthew Bandyk

Posted: October 10, 2008

At hearings regarding the bill earlier this year, bank representatives argued that the bill's changes would make credit cards harder to get by interfering with the issuers' pricing model. But Adam Levitin, associate professor at Georgetown University Law Center, argues that the bill has provisions that could help small businesses relying on credit cards. "Small businesses don't want to have to worry that a dispute with a supplier or a late rent payment or the like will result in higher costs of borrowing on credit cards," says Levitin.

But even if the bill passes the Senate and becomes law, its provisions won't go into effect for another year after its passage. No matter what Washington does, small-business owners will have plenty of reason to pay close attention to changes being made by their credit card companies. "Who knows what they're going to do in the future?" says Nicholson.

Advanta

Did you use your Advanta business card to buy groceries?

If you bought something that violates the terms of the agreement in anyway, such as purchasing non-business related items, you might have defaulted, thus ascending to the higher rate.

DC of NJ @ Jan 11, 2009 12:50:40 PM

TERM PAPER

I can now make a long sigh of relief,since this article made me if not helping me to completely and successfully finish my term paper!

I was really in a mess.Thank u so much.

Brian Lupao, University of Nairobi @ Dec 06, 2008 04:01:28 AM

Advanta hiked my rates

Advanta increased my rate from 7.99 to 26.99% with no warning and no explanation. I have never been late, never gone over my credit limit and nothing changed in my credit history. When I called, they would only give me a canned response about "many factors affecting my rate, including the current economy." There are lots of horror stories about Advanta doing this--I just found them too late.

Kristin of OR @ Oct 11, 2008 15:38:28 PM

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