Wednesday, May 27, 2009

Advanta Business Credit Cards - Imploding?

More financial earthquakes.

Got the weirdest email. Called to verify that it's true.

Great Little Book has and Advanta business credit card. Well, we did anyway . . .

The email says:

"Your Advanta Business Card account is funded by an independent trust which owns the balances you owe on your account and provides funding for new transactions. We expect the trust to stop funding activity on our accounts. The trust also restricts our flexibility to fund activity on your account. Unfortunately, as a result, effective May 30th all Advanta Business Credit Card accounts, including your account, will be closed."

Uh . . . in three days. Yes. In three days.

And they continue:

"We have also reduced the credit line on your account to the amount of your current outstanding balance plus $500 effective immediately. We will send you additional information about why we have taken this action in another letter."

Oh good. Does that mean I won't read about you being taken over by a federal agency in the next two days?

My office manager's husband has a business -- and an Advanta business credit card. Same news.

At the same time, we have now received three offers for pre-approved credit cards. The most recent is from UPS (the folks who compete with Fed Ex).

NOTE: This is a great time to be hyper vigilent about credit. If your credit card company decides to get out of the business and the notification email gets stuck in the spam filter, you could ring up some bad charge attempts -- especially on automated recurring billing.

Next up: Will my clients' monthly recurring billing go off without a hitch on June 1st?



  1. I got the same email and snail mail letter to same effect a day or two later. I thought Advanta was a nice option for business credit cards compared to the big guys. Sorry to see this happen. On another note, I got a letter from Capital One saying my interest rate was going up to 22.49%, one of the reasons was the current economic climate. Yikes! Seems they are ASKING for their customers to default or cancel their accounts. Fortunately I don't carry a balance, but I'm sure the yearly fees are the next thing they will notify me about.

  2. AND, when they lower the limit, it can lower your credit score. And if they keep lowering your limit, it can keep lowering your score.

    Time to find a new card and transfer the debt and get some miles.


    Makin' lemonade here.

  3. Our decline rate doubled last month :( And we generally don't work with riffraff banks, most my float in USA goes through American Express.

    Start getting used keeping operations (lights, payroll) funded at least 6-12 months out.

    This was subject of the recent SPAM Show, the credit crunch is ugly. And while it won't immediately affect the top of the food chain, Dave's "tough love" argument doesn't hold up because trickle effect is a reality and unfortunately the #@% is applied almost uniformly across the board.


  4. re: 6-12 months out

    I have spoken to a number of people who have had to shut down or downsize significantly because of severe cash flow problems.

    Bottom line: If you are depending on solid AR to make it through the month.... hope you're lucky :)


  5. BTW, one client had an Advanta card and her monthly charge was declined.

    Unfortunately, she also had her credit compromised and identity stolen.

    So that sucks all around.


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