Update:

They New York Times just came out with an article highlighting Advanta slashing credit limits for small businesses and increasing rates for no reason. Lots of businesses have had to balance their accounts more closely with the limited amount of credit. The recession has made it harder to gain credit and with no loans available there are limited options. Check out the article here.

While the recently passed CARD Act created unprecedented protections for consumers small business owners were left out of the picture. Business Weekly just did a story highlighting the problems that small business owners are facing.

The sweeping credit-card reform law President Obama signed May 22 is intended to protect most cardholders from practices like changing terms on short notice and retroactive rate hikes. But when the law takes effect in February, business cardholders like Rosmann won't get the same relief. That's because the Credit Card Accountability Responsibility & Disclosure Act doesn't apply to small business cards, which companies increasingly rely on in lieu of traditional financing. About 11% of all Visa (V) and MasterCard (MA) purchases are now made with small business credit cards, up from 3% a decade ago, according to David Robertson, publisher of the credit-card industry newsletter The Nilson Report—and that doesn't count volume by American Express (AXP), one of the largest players in the small business segment.

So how did Advanta and other small business credit card companies escape regulation? It is a mistake of history. Back when the Truth in Lending Act was written and dinosaurs roamed the earth, small businesses were not included because they did not use credit cards in the same way they currently do. Well no one thought you could sell bottled water either and naturally small businesses have come to rely upon their credit cards more and more.

The new credit card law amends the Truth in Lending Act, which only governs consumer loans. From a post by CNN.com's SmartMoney

But for limited liability corporations and other companies that use traditional corporate cards, the same old rules will continue to apply. An amendment proposed by Senators Mary Landrieu, D-La., and Olympia Snowe, R-Maine, to extend protections to any businesses with 50 or fewer employees was defeated in the Senate last week; instead, the final bill directs the Federal Reserve to conduct a study of credit-card use by small businesses.

A study does little to alleviate the pressure felt now. Small businesses should be protected by the new CARD Act and additional legislation may be introduced soon. To learn more about small business credit card reform, check out the National Small Business Association.