So they're not letting people know until the end of the month, but they're cutting the cards on the 30th? That seems like a problem.

And, what is the motivation for the customers to pay back outstanding balances? Advanta surprised the customers, may be customers need to surprise Advanta. Unity is power - - even if there is no law on the books, society and justice system will rule against decptive practice.

Well, what are they required by law to do? I would imagine that their contract is just as we-can-change-the-terms-without-notice as any other credit card company's contract.

I agree that it's a wicked-dick move, so it'd be fun to know what kind of legal recourse their unfortunate cardholders have, if any.

Thoughts? Feelings? Poetry?

Advanta kept calling my brother after he filed for bankruptcy. He would patiently explain that he filed for bankruptcy, it was approved, his debts were discharged, and they were no longer allowed to contact him.

Then they'd call him again. And again. Not one of his other creditors made this mistake, primarily because it's super duper illegal to do this.

He finally had to call Advanta's legal department.

@twophrasebark: Couldn't he have sued Advanta for that? From a brief look at the bankruptcy laws, it would appear the creditor has to immediately stop any and all collections, otherwise they can be sued.

Interesting. I'll bet it was real easy to get a credit card from them . . . with a great teaser rate and a high limit.

Their problem now is that the default rate will go through the roof. Why should anybody pay down the balance on a credit card that isn't giving them any more credit?

Ultimately, they will go through the normal collection process (that will cost them 30 cents on the dollar) but I sure wouldn't invest in their receivables.

@Cocoa Vanilla: I think you're right. And he could have gone back to bankruptcy court about it definitely...

I'm the same, I didn't know about the end of my credit line until I saw this on here. Luckily I've already started a new credit line to keep my business at float then I will pay off the Advanta card and close it up ASAP. No tears will be shed, if this is what they want to do to their customers then [clap, clap], I'm outta here.

@maxx22:

Why should they pay it down? How about because you owe the money?
Thats the type of attitude that got us in the mess we're in to begin with.

I also believe you 'll see a lot more credit cards shut down in the upcoming months. Not the big issuers, but smaller ones, credit unions and such. For the smaller issuers, it just doesnt make much sense to keep that portfolio open with profits now being reduced by the new reform.
So eventually, all the small ones will close, and we'll be left with a monopoly ran by the big card issuers, who by that time will have figured out new loopholes to drive up profit. CARD Act FTL.

@SlappyWhite:

So the secret to the survival of abusive credit-card companies is to allow them to continue to behave abusively. Got it.

Advanta can burn in hell.

@sickofthis:

You only get abused if you let them. My credit card hates me, they've never made a dime off of me.
If you take out loans without reading the fine print, are making late payments, and taking on debt you cant afford, you deserve whatever it is you get.

@sickofthis:

Yes, it's clear to see how they were abusive. They were so abusive they let 20% of their client base get all the free money they wanted and then not pay for it. I think we'd all welcome some of that abuse.

I (used to) use my Advanta card for all my business purchases, but that doesn't mean I don't have alternatives. It will be a minor inconvenience to change any automatic payments I have setup, but I'm not going to get all upset about it.

I'm really not too surprised that they are having problems. I got a 0% deal for the life of the loan when I signed up with them. 3 years later I am still paying it down. Why pay more than the minimum at 0%?

I don't think this is accurate. I have a card myself, and just received new marketing materials promoting the card and its services.

But hey, if it does go, no big deal. There are plenty of other cards available.

When I had "postal problems", meaning they received my payment "only" 3 days before the due date, I got socked with late fees.

Apparently for them, "postal problems" means they never sent letters out so as to save on postage, thereby entitling huge bonuses to executives for a "heroic and orderly winding down of card operations in a challenging business and economic environment"

@SlappyWhite:
You've got to be kidding right? The small issuers like credit unions are the ones already using REASONABLE and not morallly-reprehensible practices in revolving credit lending. It makes just as much sense for these lenders to keep their credit portfolios as it did before the 'new reform', because most of them are not effected by anti-predatory practice law in the first place.

I noticed in a paper last week that they were offering outrageous return rates. 10% for 10 years, and you could get 7% for one! Minimum amount to invest though was $5K, and while I thought about it, the fact that I read about them first on Consumerist meant that there was a reason for offering that high a percentage rate. And if they are going out of business, how can they pay the interest? They can't!

@unobservant:

Haiku:
Advanta credit
Advising users too late
That they are cut off

I tried to write a limerick, but I couldn't come up with a fifth line :(

Business travelers on trips might have a surprise coming if their credit cards stop working. "Sorry, your Advanta was DENIED. But you can wash dishes to pay your bill."

My company uses Advanta cards and the first they heard of it was when I sent them the previous Consumerist story. Why is Advanta not telling their customers?!? This is bizarre.

I received a notice from Advanta with my April bill that they planned to double my interest rate (from 7.9% to 16%). I called to ask why (I have excellent credit personally and for my business, and had just made a $5,000 payment, which was about half my balance). They told me it was based on "several factors," and that if I wanted to stave off the doubling of the interest rate, I had to request they close my account in writing. I did so, haven't heard anything back, and have only heard about them shutting down here on Consumerist. I wonder what the interest will be on the closed cards -- can they even legally charge interest if they are no longer offering people credit?

Incidentally, the reason I chose Advanta for my business card was because it was highly recommended on Bankrate.com as a great, low-interest business card. Hmph.

Advanta lured lots of people in with low rates and high limits. Then upped interest rates after you carry a balance. From what I have read this started earlier than other cards. It almost sounds like that was what their business model was. Then probably bit them in the end as I have a balance that I am paying off. They sent a notice that they would raise interest to 30 someodd percent!!! No reason except they needed more money! I opted out.
I am paying, but if i get into situation where I cannot pay bills, They will be first to go...And I will happily spit on their grave!

I received an email this morning that all business cards are being closed as of May 30. That must be their "backup plan." Now that this 22% reduction of my available credit will lower my FICO score, I wonder if they'll quadruple my interest rate?

Wow, the owner of my company came in this morning all upset because the credit card would not work this weekend. I got my computer fired up and had an email from Advanta explaining that our account was being closed. We had no warning, nothing. We are a small business and do work for the Government. We had a small $24k line of credit with them but they nailed us with over 34% interest over the last year or so. We paid it because of the credit crunch and it is harder than ever to get a credit card. Well, we just lost a major part of our purchasing power today!!! We also just paid the card basically off this month. This is what being good stewards of our money gets us!!!

David Smith

@maxx22:

You NAILED it Maxx22. BTW, I just got this in my e-mail TODAY.

Small businesses rely on these cards (advanta, amex, chase are popular) and if one isn't interested in doing business with you anymore then the business owner has to put the payments toward the company that IS still interested in doing business. What's the point of paying a closed account anymore than the bare minimum or not at all? Inability to get credit? It's already gone!

@AuntNi:

That's the other issue. Your "available credit" is now all screwed up and you did nothing for this privilege but will be punished all the same.

Again, why should we even bother to pay it off at all when it doesn't effect your available credit boner.

I got my notice today from Advanta by email that while my credit line is going to stop, I can still pay as always and the online account as far as checking my status will remain in tact, at least for now they said. No mention if my 4.99% rate will increase on my existing bal. That's a question now in my mind. What concerns me is that if a bank card company this large bites the dust on lending who's next??

As sole proprietor of a small business, my husband just today (May 26th) received an email notification from Advanta regarding closing his business account! We hadn't heard anything about the June date until I read it here just now. We haven't received any notification via snail-mail yet either.

So, to us, 10 days notice would have been great! He now has 3 days to find another business credit card w/low interest rates. His has been 7.9% but after reading some articles about Advanta, I'm going to keep a close eye on this over the next week or so. It better not increase. All in all, this is very poor customer relations but then again, if they're going out of business, there isn't any reason for them to keep a positive relationship with their customers...or is there? I say yes, after all, their customers owe them money. Just a very bad way to treat your customers.

They definitely should have put up a notice on their site and sent an email out over a month ago. It's common courtesy to keep your customers informed, for pete's sake. ~sigh~

We received our letter in the mail today. And they are not accepting new charges as of the 29th. That leaves me 3 days to find new credit cards for our President and our employees (some of whom have business trips scheduled next week). THREE days. This is completely outrageous!! Our company pays our bill in full every month and this is the consideration we receive in return.

I read somewhere that a representative said "90% of the affected customers will be able to find alternative credit". Obviously this guy was at a bar when interviewed. I am probably in the ten percent market. I don't pay down my balance every month because my clients don't pay in 30 days. Its more like 45 - 60 days.

I own two businesses, one relatively new, with 3 people traveling every week. In this credit market where am I going to find a new business credit card for 3 individuals on 5 days notice?

Advanta's conduct is egregious giving my business and others 2 days notice. How did Advanta not monitor the trust funding its debt? How does Advanta expect its business customers to secure other credit cards in two days in order to conintue business. I am reviewing the agreement and I intend to take legal action. Any questions or comments please email me.

The same day we received the notice we were immediately declined credit. I called the number they listed for information. Response "We are no longer taking calls" CLICK!!! Does anyone know how to claim the accumilated reward points? Can't get information on that either. So far all I know is "You Better Be Quick".

These bozos are the poster boys for a F-----d up business. What sort of management team runs this circus? Anyone interested in a class action lawsuit? Let's talk about it, I'm getting some legal advice. At the very minimum, stop paying them and give them 2 days notice that their Accounts receivable is worthless! Tit for tat, you know.

My email is James@aag-usa.com; let's get these SOBs.

"Postal problems" my a$$. Letters were never sent out. Just found out today when I logged in to my Advanta account to pay my bill. Email notification were finally sent to customers this evening. Advanta really expects us to find a new business card provider, order employee cards, etc all in 3 DAYS? What a joke...

I have a small trucking company and had a $36,500. credit limit with Advanta. My drivers only carry the Advanta card to use for fuel. I was set up on e-mail notification with Advanta to notify me when my balance was within $10,000. of my credit limit so I could pay and keep trucking. Of course this was sometimes on a weekly basis when diesel went to almost $5.00 per gallon last year. Anyway, I was out of town and just happened to look on my mobile e-mail Tuesday morning to see if anything important had come in while I was gone and there it was ay 6:30 AM- We are notifying you, as requested, that your balance is within $10,000. of your credit limit. I thought that someone had stolen one of the cards or the card number but after reading further, it showed my balance and then showed my credit limit which had been reduced to just $500.00 over my balance. I could not figure out what was going on and then I received another e-mail from Advanta stating that all Advanta Business Cards were being closed. I had $500.00 on a card that my trucks were using for fuel-how was I going to get them home on $500.00? My trucks use at least $300.00 per day each in fuel. Advanta knew this was going to happen. Legally, they should have given their customers sufficient notice, at least 30 days or more, so that businesses and their employees were not stranded. This seems like a legal issue that needs to be addressed since all of their small business customers will be forced to find an alternative business card and with the credit crisis that we are all currently dealing with it is going to be extremely difficult to do in just a few days - not to mention what it is going to do to our credit scores.

My small business has had an Advanta business card for the past 8 years, the latest available limit being $40,500. This card has been used extensively through the years to support the cash flow needs of the business. Other than occasionally, the full balance was paid each month. Thus, we have been a very good customer for Adavnta and Adavnta has been a very tremendous resource for us. Now, because of the inability of other Adavnta customers to meet their obligations under the terms of their agreement with Adavnta, our company will suffer the consequences and lose this most helpful financial resource. I'm sure that Advanta holds some responsibility due to their business practices and loan decisions, but I blame this situation more on those deadbeat customers that have not fulfilled their promise to pay. Thanks to them, the good customer loses again!!!!!

@FelixGorgon: I would love to be a part of any legal action. I was on a business trip with my staff in Honolulu when I experienced difficulties with my card. I was told there was a security hold on my card. Due to the time change no one could help me until the next morning. When I talked to someone on the phone on May 21, to assure them the charges were legitimate, they still did not tell me this was what was going on. I did not receive notice until May 26 of the real story. My dental business charges 6-12 thousand per month and pays in full on time every month. I would like a few minutes alone with the Advanta execs.

I tried to comment but never got the verification.

I tried to get cards for our company after I received this notice. US Bank wanted FOUR to SIX weeks!!! Advanta's conduct is deplorable. They're punishing the few businesses managing to stay afloat by pulling the rug out from under us.

I found Comdata and they'll be sending us cards next week. I'll have feedback in another week or so. I'd be interested to know what you guys are using.