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Shocked and Appalled with Advanta Credit Card

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Allthingznew

Contributor
Aug 26, 2007
408
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I just got off the phone with Advanta, and I must warn you, I am lit.

I have a business credit card with them which I recommended here and I retract now!

I have always paid early, yes I said ALWAYS, and usually more than the minimum. I had a 7.99 interest rate. YES I SAID HAD!

I just noticed that they raised my rate on my last statement to 8.39 on charges and 30.39 on cash advances. (Which I've used once) I was like WTF? (I hadn't noticed it because I actually pay online and pay before I get the statement. I caught this last night.

So today I go to the website to do some investigation before I call and find that overnight (new statement period I paid last night before the statement has been sent to me) I find that now they've raise the interest rate on charges to 25.08 and cash advances to 35.08!!!

I call immediately cuz there is obviously a mistake. The first guy I talk to of course spouts the "various factors", "economy" crap and I'm like let me talk to your supervisor.

The supervisor tell me the same thing. I'm like I've always paid you early, most often more than the minimum, last I checked I had an 800 credit score which I know of no reason it's different, I have handled my account perfectly with you and you tell me you can't do anything to fix this mistake?

Yes you have and no we can't. I can close the account at the previous terms if I send a letter of request. He can't tell me one thing I've done wrong to triple and quadruple my interest rate and there is nothing he or his supervisor can do. (I am waiting for her to call, right)

I will get my credit reports to find out if I've been hijacked, but none of my other cards have changed, and I would think they would if that were the case.

Any ideas? I just can't believe they can do something this outrageous and there is no recourse.

Argh!
 
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MJ DeMarco

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Credit card companies make money on bad-paying customers.

I have a Chase credit card that I pay in full every single month ... I make sure they get the payment 5 days before the due date. If Chase posts the payment 1 day late, they would charge interest and late fees .... if Chase got the payment the day before, or the day of, they would hold the payment for a day or two so they can explicitly charge me these fees. These companies will do anything to squeeze interest and fees out of their customers.

Problem is, they can ... read the fine print.

Your best defense is to pay on time, several days before due dates ... don't give them the opportunity to squeeze you with "Sorry sir, it took 3 days to post your payment to the account".
 

NoMoneyDown

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Aug 28, 2007
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I can't understand why they cannot give you a reason. It would seem to me that this would be covered under some kind of consumer protection act of some sort (IOW, they would HAVE to give you a reason). Also, look into the fine print for the card to see if this is something they can do. If everything points to them having to give you a reason, I'd call back and explain to them that you'll send a complaint to your state's attorney general if they withhold the information.
 

Peter2

Fastane Legend. RIP.
Aug 2, 2007
408
186
Palm Beach, FL
This is very common in todays credit market. They increased your interest based on their internal scoring that shows you are a risk for defaulting soon.

The way you wrote your post, I can assume that you are carrying a balance on your Advanta card.

How much is that balance in comparison to your credit limit?

Do you carry a balance on other cards as well?

Did you recently apply for new credit?

BTW, taking a cash advance is a HUGE red flag to a credit card company. That says you are extremely strapped for money and at high risk for defaulting soon.

The credit world is not the same today as it was just 1-2 years ago.
 
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Allthingznew

Contributor
Aug 26, 2007
408
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This is very common in todays credit market. They increased your interest based on their internal scoring that shows you are a risk for defaulting soon.

The way you wrote your post, I can assume that you are carrying a balance on your Advanta card.

How much is that balance in comparison to your credit limit?

Do you carry a balance on other cards as well?

Did you recently apply for new credit?

BTW, taking a cash advance is a HUGE red flag to a credit card company. That says you are extremely strapped for money and at high risk for defaulting soon.

The credit world is not the same today as it was just 1-2 years ago.

My balance is about 50 percent.

Other cards no carried balance, but show activity. Wait, one does cuz it had a year of zero interest.

No credit apps for over a year.

Cash advance was 5 months ago, and if I'm not mistaken should have had a fixed rate for the life of the balance, recently changed office so I'm having trouble finding stuff.
 

Peter2

Fastane Legend. RIP.
Aug 2, 2007
408
186
Palm Beach, FL
My balance is about 50 percent.


That's your whole issue. Advanta is a very strict lender. You need to keep your balance below 30%.
Transfer the Advanta balance to a different card and then ask Advanta to reconsider your rate increase.
 

wildambitions

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Aug 29, 2007
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I have had a similar experience, only to much more of an extreme as I was in financial rebuilding mode. I posted on it awhile back http://www.thefastlanetomillions.co.../10254-fico-2008-scoring-formula-effects.html and have been further rebuilding to decrease my balance ratio to 10% or less on each revolving credit type loan/card. My CC claimed they re-ran all the current card holders (read between the lines: we can charge more money to those that have higher balances because they won't be able to pay it off by the close of the next statement).



I have a new plan now and CC balance is not part of the equation. Until then, I (and evidently others) appear to have no recourse.
 

yveskleinsky

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Jul 26, 2007
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Well I also have an Advanta card, and it's always been paid in full. ...I also just got a letter in the mail about increasing the interest rate, yadda, yadda ya. Since the credit market has changed so much, I no longer base the worth of a credit card to me on an interest rate, (as it changes and I always pay in full on any balance that may generate interest) I look at their terms: no annual fee, credit limit, miles/perks for me, 0% length, etc.

Lenders are slippery littl' bastards; find a different card and do a balance transfer ASAP! ...And while we are on this topic, I though usury laws stated that anything above 30% was illegal. Is this no longer the case?
 

Allthingznew

Contributor
Aug 26, 2007
408
51
I wonder the same thing about usury. For now I think I'll take another card up on it's 0% til next August offer, it's just really aggravating to do things right and still get screwed.

If anyone does know or find out anything about what recourse we as credit card holders might have...
 
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hatterasguy

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Jul 29, 2008
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Who are these guys? I have never heard of them?
 

biophase

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Just logged on to check mine just in case... still at 7.99% whew...:cool:
 

hatterasguy

Bronze Contributor
Jul 29, 2008
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Ahh I see.

Well either way that interest rate is insane. I would tell them to lower it and if they say no ask to close the account right their.
 
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Allthingznew

Contributor
Aug 26, 2007
408
51
Ahh I see.

Well either way that interest rate is insane. I would tell them to lower it and if they say no ask to close the account right their.

I was told if I wanted to I could close the account at the previous rates. Closing the account doesn't look good on your credit report. I moved the balance to a card offering 0% for the next year.

I just never dreamed something like that would happen.
 

StreetsofSilver

New Contributor
Aug 4, 2008
94
15
PA
The same thing just happened to me 3 days ago with the Home Depot business credit card. I barely have a balance on it and I always pay above the minimum payment before it is due. They increased the rate from 9.99% to 21.99%. Yikes!

I called HD and the lady gave me the whole speal that they have the right to change the rate at anytime (yes, I understand it's called a variable rate). They acknowledged that I was a good customer. Blah blah blah

Funny, I was actually going to transfer it to Advanta before reading this.
 
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BILL WHITE

PARKED
Oct 3, 2008
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0
I had the exact same sort of problem with Advanta and they are threatening to litigate against me now because they jacked my rate from 7.99% to 27.99% because my bank denied a payment then acknowledged both to me personally and in writing to Advanta that it was their error.

The minimum payment is now beyond what I can pay. I'd never been late before. I had a representative tell me getting the note from the bank would get my rate reduced back to what I'd agreed to. It was obviously a lie.

Talk about unethical business practices...and now of course we get to bail people just like this out with tax money.

The worst thing about dealing with Advanta was that when I had questions, I'd get different answers from different people. I even corresponded repeatedly by emails, they had a 2 day delay each time and then would send me form letters that acknowledged nothing I discussed. Even there AdvantaHelps was worse, I emailed there three times and never got a single response at all.

These are the types of practices that wreck the economy. Hopefully all banks who operate in this fashion will fail and blow away.
 

Russ H

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BILL WHITE said:
These are the types of practices that wreck the economy. Hopefully all banks who operate in this fashion will fail and blow away.
Hmm . . . perhaps a different perspective from an old fart (me).

What you all are experiencing is REVOLVING CREDIT during a tightening phase.

We've just gone through about 23+ years of super low rates, easy credit, and massive growth in CC companies competing for business.

Now, though, credit is tightening. Has been for the past 18 months.

So, revolving credit card rates go up. Credit is harder to obtain. Card limits will not be raised as much.

AND-- expect LOTS of nuisance charges (late fees, extra "add on" charges, etc). Stuff that doesn't even make sense-- and that you have to contest-- multiple times. That's also the norm for this type of tight credit market. Banks actually make MORE on the nuisance fees than they do on the interest!

Perhaps some of you did not have cards w/big credit limits back in the 1970s- early 1980s, when these practices were common? That might explain the shock.

If that's the case, just a heads up: Expect this to happen to LOTS of different credit cards, as long as we are in a recession.

Just how the markets work.

-Russ H.
 

Runum

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Oh yeah, I agree. I work real hard to never have to rely on revolving credit again in my life. I have gotten on that cycle a couple of times before. It never ends well for me. To me credit cards have become a necessary evil.(ie reservations, rent car, online shopping etc.) Pay the dang things off every month and the interest rate doesn't matter.:cheers:
 
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hatterasguy

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Jul 29, 2008
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Don't rely on credit cards. If its not for basic food and shelter you don't need it, don't charge it.

If an interest rate change makes it so you can't pay, you have more debt than you can afford.
 

NoMoneyDown

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Aug 28, 2007
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I thought the House just passed the Credit Cardholders Bill of Rightsl recently that limits what CC companies can do to their customers (or maybe it did, but is waiting on Senate approval). For instance, they just cannot jack up your rates without giving you fair warning, and they MUST bill you 25(?) days before a payment is due. See more info here and here.
 

Jito

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Dec 2, 2007
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I thought the House just passed the Credit Cardholders Bill of Rightsl recently that limits what CC companies can do to their customers (or maybe it did, but is waiting on Senate approval). For instance, they just cannot jack up your rates without giving you fair warning, and they MUST bill you 25(?) days before a payment is due. See more info here and here.

Good reading, but since when did credit card companies play fair?
 
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Russ H

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Jito said:
. . . but since when did credit card companies play fair?
C'mon, guys-- the fastlane is not a board with folks who have "I'm a victim!" mentalities.

It's SO EASY for a CC company to inform you that their rate is going from 5.9 to 29.7%-- all they have to do is put it in their monthly statement, BURIED amongst lots of other less important news.

99+% of their cardholders will never read it.

But they will notice (as did the OP) their next statement, at which point it's too late.

If you find this happens to you, perhaps it makes sense to transfer part-- or all- of the balances to another card.

As long as you make sure the card you transfer to doesn't do the same thing! (I'd suggest it might).

-Russ H.
 

NoMoneyDown

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Aug 28, 2007
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Round Rock, TX
If you find this happens to you, perhaps it makes sense to transfer part-- or all- of the balances to another card.

Just read the fine print as most charge a 3% balance transfer fee.
 
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Allthingznew

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Aug 26, 2007
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Just read the fine print as most charge a 3% balance transfer fee.

And typically a $99 max too. You have to do the math to see which is better. For me, I saved a ton of money by spending $99 to move it, and I have no interest until next Sept, so if I pay it off by then I'm way ahead of where I was.

My point in starting this thread was to give people a heads up that you don't have to do anything to have things go wrong, and I was quite agitated at the time of writing. Still none of my other cards have done this to me, but I will be more diligent in watching them too. I will save more money as a result of this than I would have otherwise, because I had no reason to look for a better rate.

My goal is to get back where I was only a year ago, pay in full every month and not worry about it.
 

glendee

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Oct 3, 2008
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And nobody believed the talking heads when they said this credit debacle would trickle down to Main Street...here it is! I'm in Fl where we've taken a RE beating. I have open HELOCS on all my property, always have, just in case. I began to notice months ago they were arbitrarily dropping the credit limit. Even on property in stable areas. You'd look up one day and the line would drop 30-40k, no letter or any kind of notice. I guess it caught up to the CC markets also, it was only a matter of time. Cash rules!
 

Jill

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I've benefitted greatly from Scott Bilker's advice on debtsmart.com There's quite a bit of stuff there. But the crux of the message is to punish the banks when they refuse to lower your rate. You CAN (if your credit is good) request that they

1) raise your limit (which will make your useage ratios look better to FICO)
2) lower your interest rate (by referencing the 0% offer from another bank which you're holding right now.)
3) lower (or waive) your annual fee

If after talking to their supervisor, you can't get any one of the three, then explain why you are paying your balance off in its entirety by moving it to the new bank. Request that they note that in your account notes. You'll be amazed how soon you'll get a better offer from the original bank, trying to woo you back. At this point, (if you carry more than one card) then move another high-interest balance to it.

It sounds like a hassle to do all this moving around. But if you work at it, you can have all of your consumer/business debt at or below mortgage rates.
 
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NoMoneyDown

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Aug 28, 2007
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And typically a $99 max too. You have to do the math to see which is better.

Exactly ... You need to weigh ALL the factors. Many balance transfers have a minimum and maximum, but a lot will only have a minimum. In the rare occasion, you may even get an offer to transfer with NO fee at all (although it may be a little harder these days to find).
 

Russ H

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Jill-

All great advice, but it may not always work as well as it has in the past 20+ years.

I think a lot of folks on the boards (everywhere, actually) don't realize that in the past 3 weeks, there have been some major incremental changes in the credit markets. Runs on banks, hoarding cash, traders in paper capital markets frozen-- this has not hit the major news, for a lot of really good reasons.

The hope is that confidence will return to the credit markets. Even if it does, I'm just suggesting that all who have any kind of balance on their credit cards be prepared for some changes-- and charges-- that they've never had to deal with before.

-Russ H.
 

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