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Business credit cards for individuals risky

Oct. 22, 2010 at 5:22 a.m.
Updated Oct. 23, 2010 at 5:23 a.m.

By Alan Bligh

Did you get an offer for a small-business credit card? 'Why me' you ask? After all you don't run a business, so why the offer? It's a strategy that the credit card companies are using to get around new federal laws. Credit cards for businesses are not covered by all the protections in the Credit Card Accountability Responsibility and Disclosure Act of 2009. So, this means if you grab a so-called professional credit card, you could easily be signing up for something that can legally raise your interest rate on a whim or legally slap you with huge penalties if you miss a payment.

The new credit card law requires that bills be sent to individual consumer cardholders at least 21 days before payment is due, limits late-payment fees to $25 and bans interest-rate increases for the first year after a card is issued. Those rules do not apply to business-related cards.

As the debate around online privacy and advertiser access to users' data continues, a group of the advertising industry's largest trade organizations has announced the details of a self-regulatory program that would allow users to opt out of being tracked by its member organizations. The program would affect the 5,000 companies that are represented by the trade organizations, which include the American Association of Advertising Agencies, the American Advertising Federation, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau, with additional support from the Council of Better Business Bureaus who will be monitoring the program. That's right, BBB will be making sure that the rules are followed. The Victoria business community will be represented through its Victoria Advertising Federation and, of course, BBB.

If things were not confusing enough, they soon will be. As a result of federal law suits and a new consumer protection law, retailers will soon be able to charge different prices for the same item, depending on how you pay. Pay with a rewards credit card, the price will be higher. Use a plain, vanilla credit card, and you'll pay less. Use a PIN number with a debit card, you'll pay less, but not as low as paying with cash. Pay with American Express, get charged one price. Pay with MasterCard, get charged another. What is certain to happen is price confusion because retailers are not likely to post all the prices that apply to each item. Welcome to the new era of fuzzy pricing. We will keep you posted on how this trend develops.

Every once in awhile, someone will ask me what is the biggest mistake consumers make? A difficult question. When it comes to scams, the main problem is that consumers do not stop, take a deep breath and investigate before sending money or revealing private information. With building and remodeling contractors, there are two main mistakes. One is paying too much money up front before any work is done. The second is a failure to secure a detailed contract outlining exactly what must be done. Don't say, "add a 10 by 10 room" period. What about what kind of floor, what kind of light fixtures, number of windows and doors, etc? Remember, contractors are not mind readers. Everyone needs to be in agreement before the work begins.

Alan Bligh is the executive director of the Better Business Bureau in Corpus Christi. Contact him by e-mail at abligh@corpuschristi.bbb.org.

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