Advanta is wrapping up its credit card business, quickly. News of the company's plans to cut off credit were reported earlier this month, and the company said would notify customers at "the appropriate time prior to June 10." Apparently the appropriate time was yesterday. My boyfriend received a second day air letter at our apartment informing him that his card was being cut off -- in just two days. The Philadelphia Inquirer reports:
Advanta Corp. said yesterday that it expected to move up the date after which its customers would no longer be able to use their credit cards, to next Saturday from June 10.
The Spring House company, which specializes in credit cards for small businesses, said last week that it was freezing nearly one million accounts to cut its losses and preserve its capital reserves.
Industry analysts called the swiftness of the action unprecedented. Advanta posted a first quarter loss of $75 million and last month its customers defaulted at a rate of 20 percent.
While the unexpected shut off maybe merely inconvenient for some consumers, it could cause major problems for a number of small businesses who use the card regularly to cover expenses.