Advanta Freezing All Credit Card Accounts

Getting calls all night from Advanta Business customers. Advanta is closing its business accounts with almost no notice to business owners, creating panic.

Advanta is telling customers that they are closing these accounts because Advanta’s supply of money for business accounts has been cut off by their lenders.

One customer read me his notice, and that’s what it said.

BUSINESS CUSTOMERS DEPEND UPON CREDIT

These customers depend upon these credit lines to run their businesses. So now they’re calling around in a panic, trying to get new credit card accounts, or trying to get credit increases on the other accounts they have, in order to make up for what they’ve just lost.

Many had credit card accounts with credit limits above forty thousand dollars. Their credit limits have now gone to zero, and their cards have been restricted so they can’t be used.

What this means is that business owners have no option other than making arrangements to pay what they owe and look for credit elsewhere which – from what customers told me tonight – is going to be hard to find.

For instance, the lender I work for is not granting any credit limit increases at all.

MAY 12th THEY KNEW THEY’D PULL CREDIT 

I just googled “Advanta” and found out that The Philadelphia Inquirer broke this story four days ago, stating that, due to rising defaults, Advanta is freezing all credit card accounts - nearly one million of them - to cut its losses and preserve its capital reserves .

Too bad the folks I talked to didn’t know about it. Not that four days would have have made this bitter pill any easier to swallow.

I suppose it’s pointless to point out that customers should have gotten written notice of the changes to their accounts fifteen days before it happened. There’s probably a loophole for a company that’s had its own credit pulled.

Advanta certainly had time. It was reported on May 12th that they knew they had problems in March. So they knew the crunch was coming and had time to send out notices. 

Maybe they were trying to pull a rabbit out of their hats at the last minute. Or did they decide to forget about giving notice until top execs could sell off what has now become a penny stock?  (Call me cynical.)