Small businesses need to manage their cash flow, and in times likes these, that's not so easy.  If their customers fail to pay on time (or at all), they're left having to find a way to pay their employees and purchase their inventory until the cash comes in.  Since for now banks are not cooperating with small business loans, many owners have resorted to business credit cards to carry them over the rough times.  That's fine if things go smoothly, but beware--business credit cards are not as friendly as they used to be.  Here's why. 

• Some credit card companies are reporting your business credit on your consumer credit report.  We know, for example, that Capital One is doing that because Aleksandra Todorova reported in The Wall Street Journal that business owner Byron Hebert, who had secured two credit lines in the amounts of $7,000 and $25,000, was stunned to learn that his business debt was now being reported alongside his consumer debt.  But guess what.  His business's revenues were not being reported, so it looked like he was really overextended.  How can banks do this?  Well, there's normally a little clause in the agreement you sign that says if your account ever becomes delinquent (your payment arrives two days late), the bank can go after your personal assets.
   
• If that isn't enought, the federal government has enacted the CARD Act, which goes into effect on February 22, 2010 and is supposed to protect consumers from credit card issuers raising interest rates on existing balances.  That's great except that the government, not exactly known for being small business friendly, has exempted credit cards issued to businesses, so credit card companies can still hike your rates on existing business balances.  Since they no longer can do that to consumers, where do you think they're going to go to collect the deficit---that's right, you, the small business owner.  Be prepared for your interest rates to climb.
   

Keep in mind, it's legal for credit card issuers to report business accounts in good standing to the consumer credit-reporting agencies.  If you're thinking about applying for a business card, watch what your bank does after February 22 and then decide if a business card is right for you.  The devil is always in the details.