Source:
Cleveland.com, APSmall business credit card lender to close all accounts
by Associated Press
Tuesday May 12, 2009, 4:44 PM
NEW YORK -- Advanta Corp., a credit card lender to nearly 1 million small businesses, will close all its cardholders' accounts next month in a last-ditch effort stem losses.
Analysts said the move adds to already growing concerns that the company might not be able to survive. And while other credit card issuers won't likely fall into Advanta's situation, analysts said, worries remain that they might decide to cut credit lines further on small businesses.
"Advanta's problems call into question the business model at the end of the day," said Keefe, Bruyette & Woods card industry analyst Sameer Gokhale. "Are these really small business cards, or just consumer cards with really high credit lines?"
As of late March, Advanta wrote off about a fifth of its credit card debt as unrecoverable.
In anticipation of losses escalating further, Advanta said late Monday that on June 10 it will shut down all accounts. June 10 is when Advanta will offer to pay off investors who hold securities back by its cards -- a type of payout known as an "early amortization" of a trust. This way, Advanta said, the company can "maximize its capital and its liquidity measures."
(more)
Read more:
http://www.cleveland.com/business/index.ssf/2009/05/small_business_credit_card_len.html#more
I'm really surprised they stayed in business this long. I've got a corporate Mastercard with them. My company is "Murder Inc.".
Really, no shit.
I've had the card for 12 or 13 years. Back in '95, when I bought my first computer, a friend came over to help me set it up. When we were setting up Windows, he typed in "Murder Inc" for the company name. After a while, I started getting mail for this company. Then a credit card solicitation from Advanta. I wondered if they would really send out a card with that name on it. I filled out the application. I put down "zero" in the sales and earnings questions.
Sure enough, they sent me the card. The first place I used it was at a casino in Atlantic City. They've raised my credit limit over the years, but my balance is zero.
And you wonder how dogs and cats get credit cards.
I wonder now, which criminal enterprise bank will take over the "Murder Inc." account.