Timely Action for Credit Card Reform

Getting great service and rates on your merchant credit card account

US Business Finance Corp has been following the action of two federal offices' and the Federal Reserve's proposed (and already internally approved) "Unfair or Deceptive Acts or Practices" rule intended to restrict certain practices by credit card issuers. US Business Finance Corp has a history of helping business obtain merchant credit card accounts, especially small businesses that fall into the high risk credit card category.  These rules were spurred in part by the GAO's report in late 2006 on credit card practices and the thousands of letters the Federal Reserve Board received.

The proposed rule reinforces the current disclosure rules by requiring financial institutions issuing credit cards to include in any sales material a clear statement of how their interest rates are determined. In material advertising multiple rates, the financial institutions also need to supply the factors that determine whether a consumer qualifies for the lowest rate. The rule also favors small business owners financing their businesses with their credit cards by stopping card issuers from dealing with credit card payments as "late" without giving cardholders a "reasonable" amount of time to make their payment.

The ruling will also curtail the credit card issuers' ability to raise interest rates on outstanding balances except in certain circumstances and allow the cardholder to pay off the balance at the lower rate over a reasonable period of time. This rule also finally puts an end to "double-cycle billing", which is when card issuers charge interest on balances already paid.

The president of the National Small Business Association, Todd McCracken welcomed the proposed rule pointing out, "With more small- and mid-sized business owners identifying credit cards as a source of financing more than any other capital resource, it is imperative for America’s economic engine - the small business community - that Congress recognize this proposal as a welcome first step, however, and not a mission accomplished."

Small business owners and credit card users can email their comments on the rule until August 4th, 2008 to the Federal Reserve. Send your email to [email protected] and include "Docket No. R-1314" in your subject line.

US Business Finance Corp supports these changes since our whole business philosophy rests on creating win-win relationships with our customers, whether providing them merchant credit card accounts or business cash advances. As all business people realize, the foundation of good business rests on the bedrock of trust.