Nick Bourke, director of the Safe Credit Card Project, an advocacy group that led the Pew study, says the banks’ reluctance to extend CARD Act protections to smaller firms comes down to revenue. “People have always paid a lot for credit,” he says. “This legislation has made costs more aligned with the market.”
Still, a growing number of card issuers are voluntarily adding some of the protections to small-business cards, including Bank of America, Capital One and American Express. Alisson Andrade, a senior analyst at Corporate Insight, a New York-based research firm, says the move is part of a broader marketing effort. “Small-business card issuers are trying to give cardholders more incentive to use them,” Ms. Andrade says.
As an alternative, smaller businesses might consider using a regular consumer credit card until protections are in place, says Beverley Harzog, a credit-card analyst on credit.com. “Depending on the size of the business, a consumer card may be a good fit. And they’re protected if they get in trouble,” she says.