block707

The current unemployment rate is still much higher than many would like. According to the U.S. Labor of Statistics, 8.2% of women are unemployed. The same report goes on to say approximately 9.2 million Americans are only employed part time, due to employers not being able to afford employees full time. These statistics have compelled people to become entrepreneurs to gain employment. The Credit Card Act of 2009 could give relief to these unemployed entrepreneurs, but only on their personal credit cards.

The Credit Card Act of 2009 was signed by President Obama last May. With some provisions already started this act will be in full swing Feb. 22, 2010.

What are the benefits of this act?

- Cardholders will be able to avoid interest rate increases on their existing card balances and have more time to pay their monthly bills.

- Before the bill passed, many card companies could change their due dates without notice, giving you less time to pay your bill. Now credit card companies will have to give you no less than 21 days to pay your bill, and will not be able to raise interest rates without notice.

According to the National Small Business Association as of 2008, credit cards were the most common source of financing for small business owners. The New York Times reported in September of 2009 that a study from Monmouth University said, "every $1,000 increase in credit card debt increases the probability a firm will close by 2.2 percent." And with this increase in debt, lead companies are now able to buy debt leads from these card companies and make a profit.

This new act will benefit many Americans, however, it does NOT cover business/corporate card holders. This is an important thing to keep in mind when starting your business. We could see credit card companies being harsher to business owners since they will be forced to ease up on customers with personal accounts.

Banks are a lot harsher these days when it comes to giving out loans. They are looking at personal debt as a factor for small business loans. Because of this, it is important to first look at your credit card debt before going into business. If you have acquired some debt, debt consolidation or credit card counseling may be options to consider.
These types of programs can streamline your personal debt and make it easier to get out of debt. This will help you get your finances in order which should help your chances of getting a loan for your business. If your business is already up and running, however, take a look at your current debt levels. If it is a significant amount, decide if you can manage the debt or if you need to take advantage of a debt management program.

For now we will just have to wait and see if credit card companies will be harsher towards their business/corporate card holders in the upcoming months. Until then, take a look at your personal credit cards and see if you can utilize the act to help you get a business loan to start your business.

Jessica Gombes is an expert writer on phone systems and is based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as VoIP service at Resource Nation.