Millions of individuals and small business owners using credit cards labeled for business or commercial use are at risk of deceptive credit practices, according to a recent report from The Pew Charitable Trusts.

The Credit CARD Act of 2009, which was signed into law two years ago, made consumer credit cards safer and more transparent. However, its rules did not apply to cards labeled for business or commercial use. Practices the Federal Reserve deemed "unfair" or "deceptive," such as hair trigger interest rates and unpredictable rate increases, remain widespread in business credit cards that are regularly offered to American households, according to a statement.

Forty years ago, business credit cards were excluded from federal consumer protections because policymakers concluded business owners were in the position to analyze risk. Pew found that between January 2006 and December 2010, American households received more than 2.6 billion offers in the mail for these financial products.

"Every month more than 10 million business credit card offers are mailed to households at all income levels," said Nick Bourke, director of Pew’s Safe Credit Cards Project. "The sheer number of offers that are sent to homes all across the nation represents a risk to millions of American families. To better protect individuals, families and small business owners we urge that the safeguards found in the Credit CARD Act be extended to any card on which the cardholder is personally liable."

Key findings from the report include:

• Eighty percent of business cards included an "any time" change in terms clause with no right to opt out, which means that bank issuers can change account terms at any time with little or no notice.
• Eighty-four percent of business cards gave issuers the sole power to apply payments to low-rate balances first, which maximizes charges on higher-rate balances.
• Sixty-seven percent of business cards included penalty rates for late payments or overlimit transactions. Issuers can apply a penalty interest rate immediately and without notice for any violation and that rate can last indefinitely on any balance. Under the Credit CARD Act, penalty interest rates may not be applied to existing balances on consumer credit cards, unless an account is seriously delinquent.
• Penalty fees are virtually unrestricted and may not be reasonable and proportional to the violation. Seventy-three percent of business cards included a late fee (median amount $39), while 67 percent included an overlimit fee (median amount $39).