I wanted to mention a situation now occurring I believe due to the tight credit crisis and the banks, such as Advanta, trying to minimize credit card balances and become more liquid due to bad loans, credit cards with too low of an interest rate, etc. And reduce their exposure of credit card losses. I believe this is directly part of the credit crisis and Advanta is giving a lot of their small business credit card holders the shaft.
I have been carrying a balance on my card for several years now and had a decent rate of about 10.3%. On August 13, they claimed they sent me a letter that after a review of my credit report, payment history, etc. And using their own "proprietary formula", decided to jack my interest rate to 30%. I have been reading some of the consumer complaint websites and I have found over 60 others they have done the same thing to and for no valid reason. Personally, I have excellent credit and credit score and over about 10 years or more with Advanta, I had only 1 late payment by 2 days. Fortunately, I have enough liquidity to pay them off this week so they can't steal any more of my money.
This is a sure sign of things to come, especially for the small business owners who need the credit to operate their business. I also believe this is illegal by Advanta and hope someone will drum up a class action lawsuit against them.
I have also been reading that they are accepting new customers at their 7.99% interest rate and then shortly thereafter jacking the rates to their default rate of 29.99%.
Sincerely
Doug
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