Beware of professional credit cards

A Wall Street Journal article this morning reminded me to warn everyone about one of the banks’ newest tricks to sidestep the new rules from the Credit Card Act of 2009:  professional cards.

These cards, also known as small-business or corporate credit cards, are not subject to the limits on interest rate changes, shortened payment cycles, inactivity fees, applying payments to the lowest interest balance first, large over limit fees and changing card agreements without any advanced notice.  Banks have been inundating ordinary consumers with offers for these cards, about 2 1/2 times as many as they used to, offers that often don’t adequately distinguish these as a different class of card that is not subject to the new laws.

Chase is, of course, among the banks using this tactic heavily.  Chase’s Ink card is one of these so called professional cards that is immune to the new laws.  Being late on your new Ink card by only one day would allow Chase to raise the rate to 29.99%.   Chase’s website for the Ink card touts benefits mostly reminiscent of consumer grade cards, such as rewards and cash back, offering little distinction as to why these cards are better for small businesses, or anyone, than normal credit cards that are subject to the new laws.  Perhaps the Chase Ink card should be called the Red Ink card, as it will cost you more.

Don’t be fooled, you don’t need one of these professional cards.

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