When the new Credit Card Reform Act was first unveiled, many consumers breathed a sigh of relief…and most small business owners were feeling left out in the cold. How the new credit card legislation will affect you depends on two things: 1) what type of card you have and 2) how your small business is incorporated.
Because the new laws alter the Truth in Lending Act (which solely governs consumer loans) they aren’t applicable to corporate cards. For example, if you go out and purchase office supplies on your personal credit card, you’ll be covered by the new laws. The same goes for purchases made on your business card that’s based on your personal credit. This is the case for most sole proprietors. However, if you use your corporate card, the rules change a bit. Limited liability corporations and companies who use traditional corporate credit cards won’t be covered under the umbrella of the new credit card laws.
This isn’t to say that the laws won’t change in the future. Recently, legislation has been introduced to the House of Representatives that proposes covering small businesses with 50 employees or less by the new credit card rules.