Even as companies are slashing limits and canceling accounts, a growing number of small businesses are still leaning on credit cards to survive.
According to the National Federation of Independent Businesses, 85% of small businesses are using credit cards. Another survey from the National Small Business Association found that 59% of respondents are frequent card users.
During a U.S. Senate Committee on Small Business and Entrepreneurship hearing yesterday, Sen. Mary Landrieu (D-La.) said she is hoping an amendment that she filed along with Sen. Olympia Snowe (R-Maine) to the Credit Card Act of 2009 (H.R. 627/S.414) gains traction. Landrieu said the credit card protections applied to individuals should also cover small businesses.
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In addition to ensuring that the cards used by small business owners are covered, the Landrieu-Snowe amendment would increase the Truth in Lending Act exemption of cards with credit limits of $25,000 or more to cards with limits of $50,000 or more. Fifty-two percent of respondents to the NSBA survey reported having a credit card limit of $25,000 or more, essentially eliminating them from any of the protections of the Credit Card Act without the Landrieu-Snowe amendment.
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