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Bank of America Tops Small-Business Study

Wells Fargo, HSBC and U.S. Bank lag behind all other issuers in applying such protections. While these banks abide by the current interpretation of the law, they are doing the minimum. To add insult to injury, they refuse to be clear and up front about their exact policies as they relate to business credit cards.

It therefore seems that they care more about hanging onto a dying system for as long as possible than they do about serving the needs of their customers and leading their industry into an era of full transparency. Unless these three issuers in particular wake up to the realities of the new credit card landscape, they risk alienating their prospective customers and seeing their business credit card divisions experience a declining market share.

On the opposite end of the spectrum is Bank of America, which is far and away the best business credit card issuer. It was the only issuer out of the 10 largest banks in the U.S. to protect its indebted business credit card accounts from arbitrary interest rate increases. In fact, it was the only issuer to apply all five key CARD Act protections to its business-branded credit cards.

Small-business owners have two practical options. They can either use a Bank of America business credit card for their business spending or use a personal credit card for purchases that will result in a revolving monthly balance and a business credit card of their choice for all other transactions. Any other payment strategy would be irresponsible -- tantamount to gambling with company debt.

Ultimately, Card Hub's study has two main implications. First, a clear hierarchy exists within the business credit card market. Each issuer's efforts provide insight into organizational strategy and clearly establish the bank to which consumers will likely gravitate. Second, major changes are necessary from certain issuers, namely Wells Fargo, HSBC and U.S. Bank. These changes are inevitable. Whether they are made proactively or as a result of federal regulation is the question.

Until either occurs, however, we can expect the business credit card market to become increasingly top-heavy.

>To submit a news tip, email: tips@thestreet.com.

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Odysseas Papadimitriou is founder and CEO of Card Hub, a website with an extensive collection of business credit cards for new businesses as well as the best credit card rates.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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