Small businesses should be treated differently under credit card law

Credit card issuers could have more difficulty assessing the creditworthiness of small businesses than of consumers, restricting issuers' ability to adjust interest rates, possibly leading to higher initial interest rates, which would harm those firms that borrow on small business credit cards, the report found. Or if credit card issuers were to reduce credit limits in response to such restrictions, even those businesses that use credit cards for transactions and cash management would be harmed. 

"It is not apparent that the potential benefits of applying substantive restrictions similar to those in TILA (Trust in Lending Act) to small business cards outweigh the risk of increased cost and reduced credit card availability for small businesses," the report said. 

At the end of 2009, 83 percent of small businesses used credit cards, 64 percent used small business cards and 41 percent used personal cards. Despite the widespread use of cards, only 18 percent of businesses reported borrowing on the cards, 12 percent of those holding small business cards and 12 percent on personal cards, according to the report. 

All told, credit card debt represents a very small percentage of total debt held by small business owners to finance their operations.