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Advanta Business Card / Predatory Practices

1 Salt Lake City, UT, United States Review updated:
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We signed up for a 7.99% business credit card. Within a few months of taking out a $25k cash advance at that rate, we were notified of an account modification that, in the words of a customer service rep, was "a slight change to our lending guidelines since your account was established." That slight change was a massive increase from 7.99% to 18.99%.

The letter was dated Feb 29, 2008 (date of letter, not receipt) and the new rate was effective March 20, 2008. The March 20 change was conveniently 5 days before the end of the billing cycle so that Advanta could take advantage of the billing clause that "any change in APR becomes effective as of the first day in the billing cycle..."

Note that this increase in interest was NOT tied to any late payment. This was verified by a customer service rep.

After receiving the letter, I scraped up enough money and paid the balance in full (with an additional $200 paid by a merchant rebate) two days before the March 20, 2008 change. But because I did not send a signed written notice that I rejected the modified account terms, Advanta billed me finance charges for the previous month on the cash balance.

I am so incensed by the massive escalation of interest, the short notice and retroactive finance charges. Obviously predatory practices. I formally told them I would be contesting the $79 left on my balance and to close my account.

We can only imagine how many people they rip off this way. It seems clear to us, they've automated this way of doing business to fleece people who don't rapidly respond to their unethical business practices.

In an e-mail, the customer service rep wrote that the change occured because "Advanta reviews lending guidelines on a regular basis to ensure that they are in line with industry standards and the changing economy." Except they are still advertising the 7.99% rate on their website and mailings. Who do they think they're kidding.

Other ways they fleece customers: "Cash Back Rewards" that aren't credited to your account but sent as cutout checks in sheets of paper behind regular account statements. They realize people, particular ones with online accounts and software, won't open or even notice the checks. So these "void within 90 days" checks will go unused. More profit for Advanta! The envelopes containing these checks won't have any unusual markings and just says "Statement Enclosed." But envelopes that have cash advance checks and other ways to get you in debt have "Inside: Important Information About Your Account" on the envelope. Do you see a pattern here?

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Comments

  • Rh
      3rd of May, 2008
    0 Votes

    They did the same exact thing to me. I was incensed, raved, ranted, called, emailed, did everything I could do short of something I could see the penitentiary for and these fleecing idiots were almost smug about their unsavory tactics. I paid my entire $8000 balance off in full (using balance transfer on a more "reputable" card I carried) and will NEVER DO BUSINESS WITH ADVANTA AGAIN. ******WORD OF ADVICE------DO NOT USE THIS COMPANY------THEY'RE A SCAM!!!

  • Ma
      2nd of Jun, 2008
    0 Votes

    I also have had the same horrible experience with Advanta - they jacked up my interest to 36%! I had also applied for a promo rate for a balance transfer and payed my bills on time. Unfortunately, I paid the day that it was due (July 4th) but because it was considered a Holiday they didn't apply it to my account till the next day and then removed my balance transfer promotional rate due to a "late" payment. THIS COMPANY IS A SCAM AND THEY PRACTICE PREDATORY LENDING. They told me the reason that they increased my interest rate to 36% was because my credit rating had "changed" - it was the same as what it was when I applied! STAY AWAY FROM THEM AT ALL COSTS. I will be paying my balance in full this month - I called them to have them decrease my rate and they refused. They need to have a class action lawsuit filed against them.

  • My
      17th of Jun, 2008
    0 Votes

    Same exact story here...even down to the $ 79 cash advance interest fee after the full balance was paid ($6, 600). The only difference was my initial rate was 7.99% and, over a period of 3 months increased it to 34.99%! This treatment to good, creditworthy customers should be illegal.

  • Ga
      22nd of Jul, 2008
    0 Votes

    Same exact story 7.99% to 19.99. Did not see changed unitl I opened my statement. They said it had to do with risk. Never late with any bills. Nearly800 credit score. Attitude smug and arrogant.

    The truth is that they analyze accounts with high balances that make anything close to minimum payment. If you have a good payment history and strong credit ---they assume you will continue to pay regardless of change. They also assume that you do not have the capcacity to pay off. They send out an opt out notice disguised as junk mail hoping you will junk it. Also hoping the combination of mail time and you opening notice will exceed 15 days.

    Loan sharks have better business ethics. Atleast they wait for you to miss a payment before they more than double your rate.

    There needs to be a class action lawsuit!!!

  • Le
      6th of Aug, 2008
    0 Votes

    Advanta did exactly the same thing to me. 7.99 to 21.99. When I confronted the customer service on this and said I don't know of any other bank that does this, her response was simply that it had a different business model and offered to lower the rate to 19.99 - very generous! If anyone know of any planned or pending action, please let me know.
    This kind of company shouldn't exist!

  • Rm
      13th of Aug, 2008
    0 Votes

    They did the same to me. I signed with them for a fixed 7.99 rate. after a year they raised it to 19.9% . I was never late with a payment. I called customer service to complain and ask why and they could not give me a reason for the increase. The just gave a random speech on how they review use and minimum payments to determine rates. I pointed out that I was never late with a payment or over my credit limit and asked them to lower it. They would only lower it to 15.99%. I transferred my balance to a card with an 8.0 fixed rate and close my account with them. Stay away from them. They will sucker you in with a low rate and then switch it to a high rate.

  • Pa
      19th of Aug, 2008
    0 Votes

    Same story here. Opened account 6 months ago. Never late on payments, no overdrafts, etc. Today's statement lists 20.3 percent. Glad I found this website. I won't bother calling them to find out what's up.

  • Ca
      16th of Oct, 2008
    0 Votes

    My letter to the Senator (Florida) !

    Senator Nelson,

    I wrote last week to you via email regarding your position on the CARD ACT, Credit card reform proposed by Senator Chris Dodd, not the bail out. I agree with your position on the bail out and support it.

    Chris Dodd proposed the CARD ACT 2008 which regulates credit card companies’ ability to charge excessive interest rates, high fees, Prevents issuers from changing the terms of a credit card contract for the length of the card agreement (ban on unilateral changes to card agreements); Apply Interest Rate Increases Only to Future Debt, Prohibit Interest on Fees, Prevents credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholder’s behavior with respect to that card (universal default ban);Require Prompt and Fair Crediting of Cardholder Payments


    ADVANTA CORP credit card raised my interest rate from 7.99% FIXED to 26.31%. When I called to find out why my interest had gone up so drastically they blamed it on the ECONOMY. I closed this account immediately. What is worse is that there is no law to prevent the credit card companies from doing this to us (the consumer). ADVANTA and other credit cards do not consider consumers that have MODERATE interest rates and pay on time PROFITABLE. The mortgage crisis is carrying over to the credit cards, and credit card companies are increasing our interest rates substantially to "squeeze" as much money as possible from us to make a PROFIT. Credit Cards are taking advantage of the financial crisis we are facing and the deregulation that exists in the financial market to raise interest rates. ADVANTA is a business credit card and their increase in interest rates is contributing to individuals and small businesses filing for bankruptcy and leaving others drowning in debt. Credit Cards increase in interest rates is hurting the ECONOMY tremendously; people are unable to pay down their debts with these high interest rates placing ADVANTA and other credit card companies in a predicament where people are not going to be able to make their minimum payments. The middle and low class are going to be paying more FEES for defaulting on their payments. People will be paying more money to the credit card companies and will have more debt instead of less because all the money is going to pay the high interest rates and not the principal. People will be left with less spending money, slowing down the already hurting economy.

    This practice is unjust and unethical and their should be laws to protect consumers from this kind of abuse.

    Do you support the CARD ACT? Is there a better Credit Card Reform in your opinion? How can I effectively support a legislation that aims to reform credit card industry abuses?

    I understand the CARD Act is not the solution to all the problems with credit cards but I believe it to be a step in the right direction.

    http://dodd.senate.gov/index.php?q=node/4401

    Another Credit Card Reform Proposed by Congresswoman Carolyn Maloney

    http://maloney.house.gov/index.php?option=com_issues&task=view_issue&issue=298&Itemid=35

    Thank you.


    Additional information:
    I paid half of my ADVANTA debt and transferred the rest to Capital One at a 0% interest rate for 12 months at a cost of 3% one time fee.

    I hope this link helps. (Be cautious in playing the credit card game)

    http://www.fivecentnickel.com/2007/02/27/how-to-profit-from-0-balance-transfer-credit-card-offers/

    We are less than 30 days away from elections. And our VOTE is our most powerful tool right now. Take the time to visit each candidate’s website to learn the issues that affect us and let’s fight back with our vote! Only one candidate addressed Predatory Credit Card Practices.
    http://www.barackobama.com/issues/economy/#credit-cards


    Vote for the candidate that will PROTECT us from these predatory lenders!!! Also, contact your Senator.

    Best of luck to all of you, and I hope you all find a way out of your high interest rates.

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