“Professional” credit cards: beware of these

These cards, formerly reserved for small business people, are now being offered to ordinary American households, says the Safe Credit Card Project at Pew Charitable Trusts.  The problem is that if you sign up for one of these cards you may lose some valuable protections.

As the Wall Street Journal puts it, “Professional cards aren’t subject to the Credit Card Accountability, Responsibility and Disclosure Act of 2009 that reins in controversial billing practices such as sudden interest-rate hikes and inactivity fees. The law also requires that card issuers apply payments to balances with the highest interest rates first.”

The cards are clearly labeled as business cards, but usually no disclosure is made that they are not subject to the protections in the 2009 law.   Some banks (such as Bank of America) have voluntarily applied similar protections to the cards, but there is nothing to prevent them from changing that.

80% of all cards contain a provision that lets the banks change terms at any time.  Plus, says the Journal, “Eighty-four percent of the cards reviewed by Pew allow credit-card companies to apply payments to the lowest rate balances first, a practice banned under the Card Act.”

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