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| Signs of Recovery? Depends On Who You Ask |
| Wednesday, July 01,2009 10:13 PM |
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For every bit of news claiming consumer confidence is up, that banks are lending more money and that housing is recovering, there's another story about how things are looking worse.
For small-business owners who rely on business credit cards, the recessionary landscape looks extra bleak these days.
For instance, a Chicago Tribune article reveals Advanta-like behavior from HSBC, forcing HSBC-backed Office Max to stop accepting its own credit card. All over the landscape, interest rates are shooting up, credit limits are being cut, and sky-high credit scores are required for the most basic of cards.
After years of aggressive marketing to small businesses, the offers one used to find in their mailboxes daily have completely dried up.
Instead of card solicitations, the mail is more likely to bring bad news.
"Every time I open an envelope, there is Chase or Advanta or somebody either saying your credit line is cut or interest rate is going up," said Kirby Newbury, co-owner of DiscountCoffee.com, a 20-employee firm near St. Louis that ships coffee, juice and tea to businesses and consumers nationwide.
After being trained by the credit card industry to use their credit cards for cash flow, the effects of the contraction of the credit market on small business can be staggering.
Newbury said he lost a $41,500 line of credit, a big chunk of the $250,000 he has in credit lines on credit cards, when his Advanta card was canceled. He said he pays off his balances each month but relies on credit cards for (large) purchases...
So which is it? Are we recovering or not?
Read the Chicago Tribune article here: http://www.chicagotribune.com/business/chi-mon-smallbiz-0629-jun29,0,4279489.story
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