Advanta Moves Up Credit Freeze Deadline, Still Doesn't Notify Customers

UPDATE: Advanta Notifies Customers About Impending Credit Shutdown

We previously reported that small business credit card issuer Advanta is shutting down all customers’ credit cards on June 10th, without giving customers much notice to find alternative cards. Now, the situation is even worse. On Friday, Advanta abruptly announced that they will be cutting off credit lines on May 30. That’s this coming Saturday.

Which is interesting and just a bit scary, considering what an Advanta rep told Consumerist commenter doctormoondog:

I just got off the phone with Advanta. They confirmed the story and told me that notices had been sent out to all cardholders, but due to “postal problems” we will not get them until the end of the month. That gives cardholders just 10 days to get new credit cards for their employees and make changes to any automatic payments which may be attached their Advanta cards. I suggested they post a notice on the website, but was told they don’t plan on doing that because they are not required by law to do so. My business isn’t carrying a balance, and this is only a small inconvenience for me, but it’s just bad business to leave their customers in the dark until the very last minute. I hope Advanta Bank Corp. painfully dissolves like a slug in a salt bath.

Other customers wrote in to tell us that they, too, first heard about the impending loss of their credit cards from Consumerist. There’s still no hint of the situation on Advanta’s home page, so let’s hope that they have a backup plan for contacting cardholders before the deadline. I wouldn’t bet on it.

Nobody is questioning the company’s need to take drastic measures. Advanta is in trouble, the Philadephia Inquirer reports:

Advanta’s customers defaulted last month at a rate of 20.15 percent, compared with 17.31 percent in March, the company said Monday in a regulatory filing related to the Advanta Business Card Master Trust, which bundles Advanta’s small-business loans for sale to investors.

Outstanding credit-card balances at the end of April were $4.5 billion. The company hopes customers will pay off their balances, but it is not clear what business Advanta will have after that.

Still, doing the bare minimum required by law to notify customers of a change that could potentially damage their businesses? Not a good way to cultivate relationships with customers you hope to keep.

Advanta moves up card-freeze date
[Philadelphia Inquirer] (Thanks, JCA!)
PREVIOUSLY: Advanta Shuts Down Small Business Credit Card Accounts

(Photo: loopzilla)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.