Credit card regulation: Big government vs. small business 

When Boeing wants some cash flow, it doesn’t use a credit card. But Mom and Pop do. John Berlau, in a letter to the editor, informs the Washington Post of how new credit-card regulations hurt small business:

Overlooked was the role personal credit cards play in business startups. According to a survey by the Kauffman Foundation, 48 percent of new businesses used personal debt of the owner, most commonly with personal credit cards, for financing.

Among the entrepreneurs who used personal credit cards to get their start was Sergey Brin, who as a college student in the 1990s tapped into this source of credit to build a search engine that today we all know as Google. This method of financing, however, probably would not have been so available had the CARD Act restrictions been in effect back then.

How many future innovative new businesses are we sacrificing with this law and other misguided credit card restrictions?

A related note: The American Bankers Association applauded this bill.

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Timothy P. Carney

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