CardHub Releases 2015 Small Biz Credit Card Study

April 29, 2015

imsis548-049CardHub recently released its 2015 Small Business Credit Card Report. The report examines the extent to which the nation’s 10 largest credit card issuers have adopted Credit CARD Act protections for business-branded cards as well as how closely they tie such cards to the personal finances of account holders.

Despite claims that small-business lending is improving, entrepreneurs continue to struggle to find reasonable, affordable capital and increasingly have been forced to finance their start-up or growing firms with credit cards. While the Credit CARD Act provided a number of safeguards for consumers, it failed to guarantee that the bill’s safeguards would apply to the cards used by America’s small-business owners. As stated in the release, an important protection that small business owners are not getting is the rule that prohibits credit card companies from raising interest rates on existing debt unless a cardholder is at least 60 days delinquent.

NSBA has long advocated for Congress to enact protections for America’s small-business owners who rely on credit cards for financing and may not be fully covered under the Credit CARD Act. In a statement to CardHub, Molly Day, VP of public affairs for NSBA explained that credit card debt instability is a huge problem for smaller businesses—particularly younger businesses since they rely more heavily on credit cards. She went on to say that if entrepreneurial people can’t garner the capital to launch a business we’ll see fewer start-ups, which means slower employment growth and less innovation.

The main findings of the report are provided below:

  • All major credit card companies hold customers personally liable for business credit card use. Also, every major issuer uses personal credit data to determine business credit card eligibility.
  • Bank of America continues to be the most small-business friendly credit card company, as it is the only major bank to have yet extended all of the major CARD Act protections to its business-branded cards.
  • Bank of America and Citi are the only two major issuers that do not report business card activity to customers’ personal credit reports.
  • Discover, U.S. Bank, and Wells Fargo are the least small-business friendly credit card companies, having extended the fewest CARD Act protections to their business-branded cards and scoring just 30 percent in this study.
  • As was the case in 2014, 70 percent of the largest U.S. card issuers offer general-purpose business credit cards. The exceptions are Discover – which is no longer accepting business credit card applicants – USAA, which does not have a business credit card, and Barclaycard US – which only issues co-branded business cards.

To view the full report, click here.