Advanta Closes a Million Small Business Credit Card Accounts
As of May 30, 2009, Advanta is closing all its small business credit card accounts. I first learned of this on Tuesday of this week when I got an email from Advanta telling me that my account would be closed this week. It was such a shock that I literally thought it was a Phishing scam. So, I headed right over to their website to find the notice there. A day later I received a snail mail letter informing me of the same.
At Queercents, we’ve talked about the chaos that ensues when a bank or credit card company fails and when a bank suddenly cuts the limits on a home equity line of credit (HELOC), and with some lively discussion I might add. Yet, as a small business owner I can’t begin to say what a hassle this notice is.
Most small businesses use credit cards to manage cash flow, pay vendors, and sometimes simply cover the bills when times are tough. Having a large chunk of your credit shut off on short notice is a royal pain. At a time when small businesses are seeing their credit crunched from all sides, it is especially troubling.
To check out the full details of the Advanta situation, you can see the full letter with opinions at Krunk4Ever and Business Credit Cards blogs. The Consumerist shares some challenges from Advanta customers and a lively discussion in the comments is worth a read.
Of course the only real course of action is to apply for another business credit card. Even so, with rates on the rise, credit limits shrinking, and approval rates declining, it makes for another complicated to-do on the list of already over-busy small businesses. I’ll be attacking that task myself in the next few days.
Has your small business been affected by this sudden Advanta shutdown? Would love to hear you share your stories and thoughts in the comments…
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No I haven’t been affected by Advanta, but I’ve got my own similar stories with other companies. While what the credit card companies are doing is distressing, I’m really trying to learn how to be better at my business budget now. The days of putting funds out there without a very clear plan/ROI are gone I’m afraid, but this not all a bad thing.
Suze Orman as much as I hate to say it is right about getting in integrity with the money!
Oh I hear you. The time for getting real with finances has arrived. Even so, though, in the startup phase of a business, sometimes a little credit can mean the difference between a go and no-go. Interesting times…