SALT LAKE CITY, UTAH -- I would like to report a complaint against ADVANTA BANK CORP for deceptive practices. We own a small business and use ADVANTA revolving credit. We have never missed a payment and have always paid much more than what was due. Our FICA score has always been very good.
On June 5, 2008 I received notice of an increase of interest rate – going from 9.99% to 19.99%. The letter stated I had until June 2, 2008 to “opt out” of this rate. This notice was dated May 16, 2008, and deceptively printed on the back of 3 cash advance checks (which we did not use). I wrote Advanta to “opt out” of the new credit card terms.
On September 5, 2008 I received notice of an increase of interest rate – going from 19.99% to 29.99%. The letter stated I had until September 2, 2008 to “opt out” of this rate. This notice was not dated but once again was printed on the back of 3 cash advance checks (which we did not use). Upon receiving this notice, I wrote Advanta again to “opt out” of the credit card terms.
On December 9, 2008 I received notice of an increase of interest rate – going from 29.99% to 37.18%. This letter stated I had until December 2, 2008 “opt out”. This notice was not dated and once again deceptively printed on the back of 3 cash advance checks. I had to wait 4 days to see the actual rate change (on the internet). The actual bill did not come for 7 more days. Indeed they did increase the rate and ignored my letters.
I then called Advanta to request lowering the interest rate; unfortunately Manager ** said there was not anther rate available. I then questioned the timeliness of the notices. In all three rate hikes I had received the notice too late to do anything about it. They state that first of all they did not receive my letters, and continued with even if they had received my letter, it would have been too late to implement, since they are only required to give a 15-day notice.
I questioned the mailing date of the notices since 2 of the interest rate increases were not dated. They stated that once they are printed, it usually takes several days to a week to get them processed before mailing. The 15-day notice is including the processing and the mailing is clearly not enough time to allow the consumer to respond and I believe that was their deceptive intention.
To keep this short and simple, officials at Advanta Bank Corporation increased my business credit interest rate from 7.99% to 27.18% (purchases) and 37.18% (cash advances). I have excellent credit and I have paid my monthly credit card obligations as required by Advanta Bank Corp. They (Advanta Bank Corp. officials) claimed that a written noticed was mailed to me informing me of the proposed interest rate increase and, at that time, I had the option of "opting out" and close the account, thereby keeping the original interest rate (7.99%) until the balance is "paid in full."
I contacted several Advanta officials and they stated that due to several factors, they reserve the right to increase the interest rate. They (Advanta Bank Corp. officials) could not tell me which factor applied to my situation, only that my interest rate was increased because I allegedly did not "opt out" in time.
I filed a written complaint with the FDIC. Within a month, I received a letter from an Advanta Bank Corp Account Specialist from the Office of the President/CEO, restating that I was given a written notice to "opt out" of the credit card agreement (i. e., increased interest rate). However, as a good faith effort, the Advanta Bank Corp Account Specialist stated that has been made to have the difference in finance charges billed on my business credit card in December 2008, January 2009, and February 2009 billing statements as if "opt out" had been effective in December of 2008. This letter was forwarded to a FDIC official.
Apparently, FDIC inquired about my complaint, and action was taken by this Advanta Bank Corp official. I urge anyone else who has had this happen to them to file a complaint with the FDIC. Apparently, others have done the same and FDIC officials are aware.
I have had this card for 2 years and only used it once for a balance transfer, which I have been paying off (on time) every month since. I have AutoPay set up through my bank (because Advanta does not offer this service) to ensure that payments are made on time every month. Payments are sent from my bank account on the 14th of every month, and my credit card payment is due on or about the 20th.
Advanta is now claiming that my last payment was late, even though it cleared my checking account before the due date. The due date was not on a business day, and apparently they did not process my payment until the next business day. The funds were issued from my bank account prior to the due date, yet Advanta will not reverse the $39 late fee or reinstate the 2.99% interest they promised to honor until the balance transfer was paid off. They are currently charging me the "default" rate of 34.99%.
I received the statement showing the late fee on 5/1. I called on the next business day and spoke to someone I could not understand, so I asked to speak with someone else. After putting me on hold for about 20 minutes, she informed me that there was no one available, but a manager would call me back "within 24 business hours". I confirmed that they are open 12 hours a day on weekdays, and calculated the day and time I could expect a call by.
I did not get a call back until over 3 days had passed, and the only information left was a name and the 800 number. I called back that day. Everyone I spoke to just told me the payment was received after the due date, and there was nothing they could do. None of the 4 people I spoke to was able to explain to me how the billing cycle and payment due date are determined, so that I could set up my AutoPay correctly to make sure they always receive their payment in plenty of time. All I learned was that the billing cycle is 29-32 days long, and that it does not correlate with the number of calendar days or business days into the month.
Damage resulting: hundreds of dollars in additional finance charges in just the first month, the $39 late fee, and a minimum payment which has nearly doubled. I will probably have to file bankruptcy over this, even though I have excellent credit with no other negative marks.
PENNSYLVANIA -- A few months ago I reviewed my Advanta business credit card and noticed that my interest rate was increased to an unbelievable 27.19% from 7.99%, along with a 2.99% fixed rate that I had for another portion of my loan that was supposed to be "guaranteed" for the life of my loan!
I called Advanta to find out if it was a mistake and they informed me that they sent me a letter several months ago explaining the rate increase and what the new rate would be...funny I never recalled receiving that letter...I think I would remember that. They told me the increase was NOT because of my credit history (I received my free credit report which was excellent, showing no late payments, great credit score and solid debt to equity ratio) but they proceeded to explain some convoluted formula that they used saying I "could" become a bad credit risk in the future???
So, based on Advanta's "logic", they would rather get rid of long-standing customers with great credit history and keep the marginal customers that have to pay their "loan shark" rates and have a higher propensity to default. I told them that I had decided to transfer my balance to another credit card company with a 7.25% rate and a 0% intro for 12 months and no transfer fee.
They didn't respond or even OFFER to lower my interest rate. They DID tell me tat I could cancel my card and in 3 months reapply as a new customer and receive their 6.99% rate????? Go figure. In the meantime they sent me "convenience" checks with a 3% transfer fee and a 27.19% rate!!! Needless to say, I will NEVER apply for credit card or deal with Advanta again...they must be having very bad financial problems.
I think that the Advanta credit card is the most unfair to any consumer. I opened a business credit card with them 2-3 years ago in which the interest rate was at 7.99%, which I thought was pretty good. I have never being late with them or with any of my creditors, however I just found out that they (Advanta) increased my interest rate to over 26%, almost 4 times the original rate. Not only I have never being late, but my monthly payment is always more than the minimum required and my balance is less than half of the available credit.
It seems that when the economy gets tough for the consumer, the credit card companies instead of reducing the interest rates to help and motivate the consumer to make the payments, they do the opposite. They make it more difficult for us. Most of us, even if we are tied with money, we really try to be a responsible consumer and make the payments on time. I don't think that "just because" they should make an increase like this. I feel that they are not acting in good faith to a good consumer.
I think that the credit card companies should be regulated in which they are not allowed to do what Advanta is doing. It is so unfair that after searching the internet I see that other people, just like me, are going through the same sad situation.
I feel that all of us going through this should get together and find legal advise, write to government representatives, etc. Make it public, so the consumers are aware of what is going on. I know I will. I have always being a fanatic of good credit, paying the bills on time, help and advise others to do the same and what is happening in our market place with Advanta and some other credit card companies, is just plain unfair. If you have a similar experience with Advanta or any other credit card, please post your comments for the consumers to be aware of what they are getting into.
37174, TENNESSEE -- I have had a small business (S Corp) for 9 years. I have had a business credit card with Advanta Bank Corp for many of those years. Always paid in advance of the due date, more than the minimum amount due, usually paid the day it arrived in the mail. All of the sudden they more than doubled the minimum amount due about a year ago for no reason whatsoever. Then they decided to raise my interest rate to 35.99%. I didn't notice that until early summer of 2007.
When I called their office to inquire about that and asked the reason, the customer service person said he didn't know. I said can you see from my record that I have excellent credit with your company. He said yes. I said can you see from your computer record that I have excellent credit with all of my other creditors too. He said yes. I asked then why did your company raise my rate up to 35.99% for no apparent reason? He didn't know.
I asked for his manager. Got pretty much the same answers from him. I did get a chance to say that I am from Chicago and where I grew up we called that Mafia loan rates and they were illegal. So when did our government allow the banks to use the mob interest rates? Would we small businesses be better off to go directly to the mob for our financing? At least we would get straight answers from them and probably a better interest rate too!
My wife and I have a small business credit card with Advanta. We have had the card for over 5 years. We have always paid the payment on time. I schedule them online to be paid from our checking account. A few months ago the interest rate began to climb. It jumped to 17.18% then last month it rocketed up to 37%.
When I called customer service and waded through all the automated stuff, I finally got to talk to their out-of-country outsourcing. Sounded like an Indian accent. Anyway, the individual was rude and flat said that it did not matter that we paid on time that they had decided to increase the interest rate regardless of whether or not we had been good customers and paid our monthly payment continuously on time. It seems to me that in these economic times, they are attacking even their good customers to increase their bottom line. I for one will be closing the account and they can find someone else to scam.
Beware of Advanta Credit Cards. They are an advertiser on this website. I am a small business owner and used this card for all my purchases, usually 10,000 per month. I paid it off every month for the last 12 months. It is the type of card that gives me a rebate check for home improvement purchases. Since I am a carpenter, I usually get a $100 check back.
Originally, it was supposed to be a low-rate card, they still advertise it as such on this website. Well, somewhere along the way, it went up to 26%. I had just had my first month where I missed being able to pay the full amount, and even since I paid off most of the balance, given the way the "daily balance" calculation works, I paid about $300 in interest.
Coincidentally, I received a solicitation to get a card at 7.9% from them. So I called to get my rate lowered, which they would not do. So, I cancelled my card and applied for a new one, but since the balance is not paid off, they won't issue me a "second" card. In an economy where we are trying to "bail-out" credit card companies, it seems that instead of giving them money, we should prosecute them for malicious lending practices. This is a sad, sad, time for the consumer.
MAPLEWOOD, NEW JERSEY -- I was so surprised to find all the complaints about Advanta. I'm a small business having the same exact issue with this company. Customer since 2005, no late payments, paid more than the minimal amount due, no problems increasing credit limits and now that we have utilized all of the credit line, they change our rate from 7.9% to 25%. Contacting the company resulted in the same as everyone else experienced. They will not budge on the interest rate!
I certainly would like to pay the entire amount off, but unfortunately in today's business climate it will be very difficult. Advanta has placed my business in a very precarious position. How can this be a legitimate practice? IS there any oversight of the credit credit card companies? I've written a letter to my Congressman, but I don't know what can be done about this. Since there are so many of us that are experiencing the same problem, does any one have any advice on what can be done?
VIRGINIA -- Like others here I have a credit rating above 750, always paid our bills on time and always paid more than the minimum payment on a card that promised 7.9% interest "thereafter" and claimed to be small business-friendly. After one year, without warning, they raised our interest rate to 31%. I called - they said the same they said to others here - you can't do anything about it.
The new rate is not just on new purchases but the entire balance. What other industry can do this? Certainly we can't go back to our customers and say - by the way you now have to pay me 24% on what I sold you a year ago. They are now advertising the exact same conditions to small businesses...beware - they have shown how small business-friendly they really are!