Bank of America Tops Small-Business Study

ARLINGTON, Va. (TheStreet) -- Bank of America (BAC) is the most small-business-friendly credit card company in the U.S., according to a recent CardHub.com Small Business Credit Card Study. Card Hub reached this conclusion after gathering information from the nation's 10 largest banks and evaluating each on the extent to which it has extended Credit CARD Act of 2009 protections to its business credit card offerings, as well as on its transparency about such policies. The study also ranked Wells Fargo (WFC), HSBC (HBC) and U.S. Bank (USB) as the worst-performing issuers in both of these categories. Still, what exactly do these findings mean? How should they influence consumer decisions?

It's important to first understand that credit card branding creates a misperception about so-called business credit cards. These spending vehicles are more consumer oriented than they are tied to individual corporations, as individual consumers are personally liable for debt incurred with them and usage information is relayed to individual consumers' personal credit reports.

Bank of America treats its business credit cards the same as consumer-oriented credit cards under CARD Act protections.

Regulators don't act as if it's the case, but so-called business credit cards should be given the same CARD Act protections as any other consumer-oriented credit card.

The banks who realize this and apply CARD Act protections before regulators inevitably require the change are therefore the most forward-thinking, consumer-friendly business credit card issuers, while those who simply abide by the current enforcement of the law and refuse to be transparent about their policies would seem to be less-sophisticated issuers that small-business owners should avoid.

Card Hub ranked these issuers according to their efforts in giving business credit cards the five most important CARD Act protections:

• Interest rates on existing balances cannot change unless the account holder is at least 60 days delinquent.
• No double-cycle billing.
• Universal default is prohibited.
• Interest rates on existing balances cannot change unless the accountholder is at least 60 days delinquent.
• Notice of 45 is required before changing the terms of a card agreement.
• Favorable payment allocation.

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