If you're like most business owners, you're probably already aware of the Fair and Accurate Transactions Act that were passed by the United States Congress in 2021. This act states that all chargebacks and fraud must be reported to the three main credit reporting agencies. The Fair Accurate Transaction Act is a great example of legislation that is in place to protect you as a business owner. There are a lot of misconceptions about this particular law. There are many different myths out there about chargebacks and what they can do to hurt your credit score.
A common myth is that because you are the business owner, you can be responsible for everything that happens with your company's credit cards. This is simply not true. An employee is a separate entity from the business and they have their own rights. They can also be held responsible for fraudulent transactions that occur while using their card. If you find that an employee is causing your business more credit card debt than it is paying, it's your legal right to hold them accountable under the FAFTA act.
Another myth out there is that you can be charged late fees and higher interest rates just because you were unable to pay your entire balance on your credit card bill. This is not true. The credit bureaus are only able to charge interest based on your outstanding balance at the time that you received the statement. Charging a customer early fees or increasing their interest rate is not allowed under any circumstances.
Some people believe that if you're not getting good marks at the credit bureaus that you will not receive business. This is simply untrue. All businesses are assessed on a similar scale and it is highly unlikely that you will experience any negative marks for doing business properly.
One more common myth is that you are personally being attacked by your credit card companies. Again, this is simply not true. They are only trying to protect their bottom line by charging you extra for each transaction they made on your account. In the end, it's up to you to manage your accounts correctly and dispute any of the credit reports that may be incorrect. The credit reporting agencies get a lot of requests for corrections everyday.
One last myth out there is that if you cannot pay off your debts in full that you are being harassed by your credit card companies. The truth is that you're only being harassed by the credit bureaus if you fail to make timely payments of your bills. If you pay your accounts on time, this will not negatively impact your credit report and will in fact, help to improve it. If you have difficulty paying all your accounts at the same time, this is something that should be dealt with by your . . . . . . credit bureaus. If you take a little time and really think about your business, you'll find that it's possible to change the credit cards for your business with little trouble.