Millions of small businesses across the country likely have some amount of experience with credit cards in the past, but those issued by each lender can come with different perks and drawbacks, and it might therefore be important for these owners to know what may be available to or required of them when they seek this type of financing.
Currently, all of the nation's largest credit card lenders – American Express, Bank of America, Capital One, Citibank, Discover, US Bank and Wells Fargo – require that small business owners provide their own personal credit information when applying for credit cards for their companies, according to the latest annual survey from the online comparison site Cardhub.com. Two other major card issuers, USAA and Barclaycard, do not offer business accounts at all. Fortunately for these owners, 2013 is the first year ever that all of the major issuers are also more transparent with the policies related to their business cards specifically.
Interestingly, even though the Credit Card Accountability, Responsibility, and Disclosure Act did not extend the various protections for consumer accounts within it to business credit cards, all of the lenders in question carried over at least some of them anyway, therefore granting additional security even though they do not have to, the report said. In all, Bank of America was considered to be the issuer with policies most friendly to small business owners, because all Credit CARD Act protections available on consumer accounts are applied to those for independent companies as well. Meanwhile, Citibank, Discover, US Bank and Wells Fargo extended the fewest such protections.
In addition, seven of the eight major business card issuers provide a large amount of data about how those accounts are being used on their owners' personal credit reports, with only Citibank not noting business card use on the reports of the person who opened the account, the report said. That could be problematic for some owners because if they have difficulties with their company's finances, but not their own, they could still see those reflected on their personal reports which could, in turn, create issues further down the road.
Small business owners need to keep a close watch on many aspects of their finances, including their small business insurance needs. Liability insurance and other such policies can carry high price tags that can be difficult for some companies to afford if they're not properly planned for.