Business Credit Cards Often Have Big Fees, High Interest

What's Hot

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

Do This or Your iPhone Bill May SkyrocketSave

11 Places in the World Where You Can Afford to Retire in StyleMore

19 Moves That Will Help You Retire Early and in StyleFamily

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

50 Ways to Make a Fast $50 (or Lots More)Grow

32 of the Highest-Paid American SpeakersMake

The 35 Two-Year Colleges That Produce the Highest EarnersCollege

5 DIY Ways to Make Your Car Smell GreatCars

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

7 Household Hacks That Save You CashAround The House

5 Reasons a Roth IRA Should Be Part of Your Retirement PlanGrow

30 Awesome Things to Do in RetirementCollege

Beware These 10 Retail Sales Tricks That Get You to Spend MoreMore

9 Tips to Ensure You’ll Have Enough to RetireFamily

They may come with business-oriented perks, but aren't required to have the same protections consumer cards do. Rates can be higher and terms can change in a blink.

Consumers have saved billions of dollars on credit card fees, thanks in part to the Credit CARD Act of 2009.

That law created new protections from crazy interest rate hikes and late fees. Unfortunately, business credit cards don’t come with those protections, and some lenders have no qualms about taking advantage of that, Bloomberg Businessweek says.

For instance, First National Bank of Omaha is now offering the NFIB Business Edition MasterCard. The name refers to the National Federation of Independent Business, which gets revenue from the partnership, Businessweek says. Here’s the interesting part: “The National Federation of Independent Business is typically thought of as an influential business advocacy group,” BusinessWeek said.

The card’s terms say the lender can “unilaterally change the rates, fees, costs, and other terms at any time for any reason in addition to APR increases that may occur for failure to comply with the terms of your account,” and that the lender gets to pick the order payments are applied in.

That means the bank can bump the APR to about 30 percent for something like a late payment, and “cardholders with two different APRs can’t pay down the higher-rate balance until they’ve finished paying off whatever they owe at the lower rate, which virtually guarantees a longer period of indebtedness,” Time says. There’s also a 3 percent foreign transaction fee, now less common on consumer credit cards, and a 4 percent balance transfer fee, higher than most consumers see.

Business cards can offer higher credit limits, expense tracking and business-oriented rewards programs, Time says, but it’s the cardholder’s credit score that will suffer if payments can’t be made on time. CardHub CEO Odysseas Papadimitriou told Time the best approach for small businesses is to pick up a business rewards card for everyday purchases and pay it off in full every month, while keeping and using a consumer card that comes with greater protections.

Another option is to go with a business card that has less crazy terms. “Bank of America has extended CARD Act protections to business account holders,” Businessweek says.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: Sam’s Club Reveals Details of Black Friday, 5 Other Holiday Sales

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,721 more deals!