Dangers of business credit cardsSuperficially, this seems a good idea. Lots of card issuers seem uninterested in whether their business customers actually operate businesses. Of course, you should never lie on an application, and you should take care that you're not in breach of any conditions in the agreement, but there seems to be a good chance many consumers could legitimately get business plastic regardless of their trading status. Just because something's possible doesn't always make it a good idea. Three years ago, IndexCreditCards.com published an article, Business credit cards can be a bad idea for consumers, that explained why -- and nothing much has changed since. The main reason is that plastic called "business," "corporate" or "professional" doesn't provide the same protections as cards designed for consumers. In fact, it's specifically excluded from some legislation. And this means, among other things:
- There are no legal caps or rules on penalty fees or rates.
- If credit card rates rise -- and that's more of a "when" than an "if" -- any increase can be applied to your old spending (your then existing balance) as well as new purchases.
- There are no rules about fixed payment dates and "grace periods" (the interest-free time you get between a purchase and the next statement due date), so you might innocently incur penalties just by not paying enough attention to your bill.
- You don't have the same statutory protections against liability for fraudulent transactions, although some issuers voluntarily provide something similar.