If you have an Advanta credit card, make sure you leave your house with cash and a backup credit card. According to an Advanta press release made public yesterday evening, Advanta credit cards will, for lack of better words, stop working on June 10th. Yes, in a public announcement titled, “Advanta Announces Plan to Maximize Capital and Dramatically Reduce Risk,” Advanta announced that, “Since the securitizations will not be permitted to fund new receivables after June 10, the Company will shut down all credit card accounts to future use at that time.”
In other words, you don’t want to find yourself with an empty gas tank at an Exxon station on a deserted highway with no cash and only an Advanta credit card on June 11th. Because your card won’t work. In fact, you may have better luck trying to use a Diners Club card (or Monopoly money for that matter).
Advanta credit cardholders, many of whom have become accustomed to receiving junk mail offers that promptly end up in the shredder, may fail to read the notice informing them of this minor change in credit policy. This is likely to cause some major problems and angry phone calls. Consequently, we’ll be on the lookout for any press release titled, “Advanta to close customer service department June 11th.”
Hopefully, Advanta will go out of its way to contact credit cardholders about these changes. In all likelihood, however, a lot of small business owners will be scratching their heads and jamming up phone lines when their credit cards suddently stop working.
On a positive note, Advanta won’t be demanding full repayment when they cut off their credit cards. However, this really won’t do much to help the small business owners who rely on their Advanta credit cards to pay their bills. And, based on current trends, I think its fair to say that other credit card issuers won’t be rushing in with new offers to replace the lost credit lines.
Personally, I’m looking forward to feedback from Advanta credit card users. Of course, I’ll be replacing a lot of words with [expletive deleted] before the comments can go live. But hopefully, the cardholders will find a new lender to get them through these difficult times. Rumor is, there’s a new White House credit card with a unique rewards program. Every time you use your card, you earn points which can be redeemed to bailout the credit card lender of your choice.
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May 26th, 2009 at 10:34 am
We use an Advanta credit card for purchasing. I was just notified today May 26th via email that they are closing all Advanta Business Credit Card accounts effective May 30th not June 10th as reported. This is the first time the company has notified us about any of this. I luckily found out a week ago from the NFIB in their newsletter and started the process of changing to a new card. Advanta has done nothing right in this situation.
May 26th, 2009 at 1:41 pm
They totally pulled the rug out from under us! I work for a small business that uses the card to fuel several company trucks as well as for suppliers. One day our credit limit went from $44,000 to $250 without and prior warning!! These guys are really low – they should have given advanced warning to good customers. We paid in full every month!
May 26th, 2009 at 4:24 pm
These new Advanta developments are very troubling. I guess, given the fact they have no funding, I can kind of understand what’s going on. In the past, another credit card company would have gladly purchased all of Advanta’s accounts. I’m just really concerned about the people who won’t find out that Advanta credit cards will stop working in a few days and even moreso for the small business owners whose sole credit card is from Advanta. Getting a new business credit card is not easy today. I think a lot of people will be very hurt by this and think a lot of people will have issues like Kim described.
Also, thanks to Frank for the update on Advanta. It is really absurd that they are moving the date up by 10 days. I really hope cardholders get informed sooner than May 29th.
May 26th, 2009 at 8:17 pm
If anyone has a recommendation for anything similar i would appreciate the advice. I had a 50k limit and cash back from advanta….i cant find anything close besides amex, which a lot of my vendors wont take. Loved advanta through and through, but this was a pretty weak move.
May 26th, 2009 at 9:14 pm
I guess the good news is that my business is thriving and doing great. This is really going to put a burden on me to convert to something else in 5 days. I am very hopeful that some smart business card company steps up to take over some of the accounts from a+ credits like myself.
May 27th, 2009 at 9:09 am
Brant,
Most of the major banks are still offering business cards – getting approved is the issue. If rewards are important to you, Amex is definitely the best, though if your vendors don’t take it, it won’t really make a difference. However, I’ve found never really had acceptance issues with Amex and use them exclusively.
Here are some major banks that are still offering business cards on their websites. I wish I had more details so I could rank them, but at the moment, the business side of credit cards is a bit of black box.
http://www.americanexpress.com
http://www.citicards.com
http://www.bankofamerica.com
http://www.chase.com
http://www.capitalone.com
If anyone cares to share information about which business credit cards are taking on new customers, definitely share it here so other Advanta victims can get new cards as quickly as possible.
May 28th, 2009 at 4:12 pm
Check your Advanta interest rate…my jumped to 34%. This is a VERY bad company to do business with.
May 28th, 2009 at 4:25 pm
34%. This is absurd. Did you default on your account by missing a payment? I can’t imagine Advanta could justifiably raise an interest rate this high without some cause.
May 28th, 2009 at 4:42 pm
Never defaulted, actually charged plenty on this card and made electronicm payments. Trust me I am not alone. Check out badcreditcards.org/advantacard.html
May 29th, 2009 at 8:26 am
Wow, this is absurd. I will definitely take a look. Sorry if my first response seemed accusatory. I just couldn’t believe Advanta was able to charge an interest rate that is 5% higher than the average default rate (29.99%) to someone that didn’t violate an agreement. If you get a chance, please share the stated reason for the rate increase, if one was given. This is truly one of the most unfair credit card practices I’ve learned of, and I hear a lot of horror stories.
May 29th, 2009 at 8:44 am
Additional information on Advanta interest rate increases.
June 11th, 2009 at 12:57 pm
I just spoke to Advanta inquiring why they reduced our limit. The answer was obvious – they are unable to extend more credit so they are reducing limits to the balance – which is very bad for individual credit scores, but makes Advanta’s numbers look better. I asked twice if this was the answer they were instructed to give. It was. I asked is they could reduce the interest rate or increase the credit limit back to the previous level – no to each. I said that I understand why Advanta had gone bankrupt with such horrendous service…
June 24th, 2009 at 6:59 am
Same here. I am a small business with a $50K credit line and pay many of my vendors automatically through the card. I was on a buying trip when they cancelled and increased my rate to 34%. AND returned to find that all my vendors were angry as their payments bounced (now owe an additional $2500 in fees to them). Is there anything that can be done about this?
June 25th, 2009 at 9:25 am
Julie,
I’m really sorry to hear about this, especially the absurd fees you are being charged. I unfortunately think there is very little that can be done to get fees reversed by dealing with Advanta. I think the only decent angle is to negotiate with your vendors, who may be willing to drop the fees to keep your business.