Advanta to Cease Small Business Credit Card Lending
May 12, 2009
Advanta Corp, which specializes in small business credit card issuance, has taken the drastic step of completely shutting down the issuance of credit beginning June 10. No new Advanta credit cards will be issued, and current Advanta customers will not be allowed to make further purchases with their cards. (Current customers will of course be liable for debts they’ve incurred.) While Advanta is leaving the door open to conducting business in the future, the new mode of operation will be to collect receivables from past customers and use that capital to pay off shareholders in Advanta’s securitization trust.
Advanta’s uncollectable debt had reached 20 percent and the company reported a loss of $76 million in the first quarter. At least one stock analyst predicted the company was headed for bankruptcy.
Advanta’s current small business customers will likely be scrambling for new credit lines, as the business credit card market has shrunk significantly. Credit card issuers that once saw the small business market as fertile ground for growth have scaled back their offers. Among the cards still marketed, interest rates have risen and card reward programs have been discontinued or watered down.
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1.Discover® More Card - 0% APR on balance transfers for 12 months & 6 months on purchases, 5% cashback bonus in popular categories, up to 1% cashback bonus on all other purchases
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2.Chase Freedom Card - 0% Intro APR and no Annual Fee, 5% bonus cash back in popular categories , 1% cash bank on everything else
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3.Citi® Platinum Select® MasterCard® - 0% on purchases & balance transfers for Up to 18 months, APR as low as 9.99% variable. $30 statement credit.
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4.Blue Cash® from American Express - Earn up to 5% cash back on gas, groceries and drug store purchases, and up to 1.5% back on all other purchases, no annual fee, fast approval under 60 seconds
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6.American Express® Gold Card - 10,000 American Express Membership Rewards bonus points when you use the card for at least $500 in purchases within the first 3 months.
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7.TrueEarnings® Business Card from Costco & American Express - 4% cash back for annual gas purchases up to $6,000, 3% restaurants, 2% travel, 1% everywhere else, 0% APR on purchases for first 6 months
