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CARD act offers consumers protection but is hurting small businesses

Wednesday, July 20, 2011

The CARD Act came into effect sometime during late February and has come with a lot of good news for consumers who were using the credit cards, but it has been hurting the small businesses.

Only the consumer credit cards are protected by the CARD Act and not the business cards. But, it is not just the consumers who are being hit by increasing interest rates, but the business owners as well. Small business owners have been struggling to cope up with the rising costs while accepting debit cards and credit cards. There has been an increase in the interchange fees that are being charged by card issuers. Merchants have to pay these charges every time a transaction is made using the credit card or debit card. The fee has been increased between 1.25% and 1.91% during 1991 to 0.95% and 2.95% in 2009. This is as per the latest reports on credit cards provided by the Government Accountability Office.

The business owners are not only being hit by higher fees but they are also getting no relief from interchange fees as of now. The interest rates are rising and the billing tactics seem to be getting more complicated and confusing.

Molly Brogan who is the spokeswoman for National Small Business Association in Washington DC has stated that an entire revenue stream had been shut off for card companies due to the regulations of the CARD Act. Hence, they would be targeting small businesses in order to make up for the lost revenue.