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. [Read more →]

Overcast yet warm outside. Rain is in the air. Going out to rearrange footpath stones in my backyard around my little pond project.

(The message above posted here automatically from Twitter. Not much to do with credit cards, though.) 

Having fallen into the low-mininimum payment cycle, a lot of Americans and Canadians are in trouble financially.

Tens of millions, in fact.

Yet, in reading comments on blogs and on-line articles, understanding for the plight of the those who have entrapped themselves seems in short supply.

Those who comment seem to think that just because they resisted the traps set for consumers, or they have enough money for a standard of living that does not need credit, that those who fell in the credit trap are deserving of shame because they “should have known better.”

In fact, it is consumers who are being accused of “taking advantage” of the system, both in regard to the subprime mortgage meltdown and the credit card meltdown, even though it is they who are now losing everything they worked for.

[Read more →]

In my last post I discussed the flaws in just one of Canadian Finance Minister Jim Flaherty’s credit card reform proposals, yet there are others.

Like the U.S. reform bill, at least half of what has been proposed isn’t going to be of much practical help to consumers in helping them get out of debt.

For instance, when you’re getting over your head in debt because your credit card interest rate has just been doubled, getting a 21-day notice or a 45-day notice that your rates are going to double is not likely to be of much long-term value in planning your exit strategy.

What you really need is for your rates to be capped so you can pay off your debt.

[Read more →]

Following the lead of President Barack Obama who signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 on Friday, Canadian Finance Minister Jim Flaherty has proposed changes to Canadian credit card legislation in order to provide more transparency for Canadian credit cardholders.

One of Flaherty’s stated goals is to help credit cardholders understand how much the credit they are getting will cost them in the long run.  

How will he do it?

His proposal is to make credit card companies provide a calculation for each customer that shows the total cost of paying off his credit card balance when only a minimum monthly payment is made. 

While the idea may sound good at first blush, it is deeply flawed.  [Read more →]

Did you know that the decision by your credit card company to give or deny you credit is based on a model in which macroeconomics is applied to the individual?

For example, a number of credit card customers who recently applied for credit card accounts with Capital One were denied credit because of - get this - “worsening economic conditions.”

OUTRAGE PROMPTS APOLOGY

So many customers expressed outrage at being denied credit based upon such a sweeping generalization (that could be applied to anyone anywhere) that Capital One was forced to issue an apology. Furthermore, the official statement said that “worsening economic conditions” will no longer be used as a reason for denying credit.

What this really means is that reps will be instructed not to tell potential customers that this is the reason - or one of the reasons - used in determining eligibility for a credit card or credit limit increase. 

DEMOGRAPHIC VARIABLES ARE USED

Neither Capital One nor any other credit card company is going to stop using broad demographic information to assess credit eligibility. It only means that credit card companies will put internal policies in place in an attempt to ensure that potential customers are not aware of the kind of factors that are considered when applying for a credit card.

Every day I speak with credit card customers who have been denied more credit in spite of good credit scores and impeccable credit histories. These customers, of course, cannot understand why they are being denied credit - or credit increases - and believe these denials are unfair and unfounded. Their instincts are often correct.

[Read more →]

It’s already old news - on Tuesday, May 19, the U.S. House of Representatives overwhelmingly passed the Credit Card Reform Act of 2009. The bill now goes to the U.S. Senate where it is expected to pass in short order so that President Obama can sign it into law before Memorial Day.

Washington Wire has succinctly summarized the bill passed by the House:

 
Quite frankly, these changes don’t strike me as having as far-reaching consequences as consumers may expect them to have. My analysis follows. [Read more →]

 It’s a good idea from time to time to call your credit card company and request some improvement in your terms.

More credit and lower interest rates are probably the most common requests that customers make. Better rewards and removal of membership fees are popular items also. But regardless of what particular improve-ments you’re after or even if you don’t have any specific idea of what you would like to see happen to your terms, it’s a good idea just to call in and ask for something. (You can always ask for lower interest rates.)

[Read more →]

 THINK YOU’RE GETTING AN INTEREST BREAK? 

READ THE FINE PRINT. 

Last post, “Agent 0016″ wrote about the CIT (Changes In Terms) notifications that credit card customers are receiving. Most are having their rates raised in May. Yet, some  customers are getting a bit of a break. Their rates are going up, but not right away. These customers are not having their rates increased until March of 2010. 

SAME OPT-OUT DEADLINE FOR EVERYONE

However, customers who want to opt out of future interest rate changes that will take effect in March of 2010 have to do so by April 17th, 2009, the same date as customers whose rates are being increased in May of 2009.  [Read more →]

   DEFINITION OF CIT

In the credit card industry, CIT is shorthand for Change In Terms. Prior to a CIT date on which new terms go into effect, a credit cardholder is supposed to receive written notice of the CIT in order to give him  a  chance to “opt out” of the new - and what may be  - unfavorable terms. 

REALITIES OF THE 15-DAY NOTICE 

[Read more →]