A dramatic surge in interest rates for small-business credit cards is leading some to call for an intervention by Congress, USA Today reports.
Over the past six months, American Express, Bank of America, Capital One, Citi and Wells Fargo have raised interest rates for new small-business credit cards offered on the Internet roughly six times faster than rate increases on consumer credit card offers, according to BillShrink.com, a consumer help site that tracks credit-card offers.
On average, interest rates for small-business cards were 13.7 percent higher in April than last October, while rates for consumer cards, on average, were just 2.4 percent higher.
The recently passed Credit CARD Act went into effect in February, but National Small Business Association spokeswoman Molly Brogan told USA Today that the absence of small-business credit-card protection in the law "is likely a significant factor in these increases over the last several months."
California Representative Jackie Speier is hoping to provide some better news for small businesses in the near future. The paper reports she is pushing for a bill to extend consumer credit-card protections to companies with 50 or fewer employees.