Small businesses across the country that make use of credit cards from Chase (NYSE: JPM), American Express (NYSE: AXP) and Chase (NYSE: JPM) will receive protections from the Credit Card Act that took effect on February 22nd.
The Credit CARD Act dealt specifically with consumer credit cards, but Bank of America and others have decided to take the legislation and voluntarily extend some or all of the protection to their small business credit card customers.
Specifically, Bank of America will add protections against rate hikes on existing balances. Bank of America will also provide at least 45 days advance notice for any rate changes on future balances, no over the limit fee and a minimum 25 days from statement closing date to payment due date.
Lobbyists from the banking industry have vehemently opposed extending the same credit card restrictions from the new regulation to small business accounts, citing that it may be potentially more difficult for small businesses to borrow money, but Bank of America said that if anything, it will lend more to small businesses over the next few years and has committed increase lending to small and medium-sized businesses in 2010 by at least $5 billion.
“Our objective is to provide solutions that help our customers better manage their daily finances and provide them with the control, choice and clarity they have asked for,” said Bank of America Deposit and Card Products Executive Susan Faulkner.
Bank of America small business cardholders will also receive a one-page “Clarity Commitment” statement that contains information such as rates for purchases, balance transfers, and cash advances, payment information to keep the account in good standing, and a summary of fees. The goal of this statement is to provide clarity
