Saturday, May 30, 2009

Credit Collapse The Next Bubble?

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In spite of consumer confidence numbers being up, one million card holders accounts are being closed by Saturday. Here is an excerpt.

Advanta is freezing the accounts of nearly one million credit-card holders, most of them small businesses and self-employed professionals, effective next Saturday. The company said it is trying to cut its losses and preserve capital.

An email sent to Advanta clients said:

Your Advanta Business Card account is funded by an independent trust which owns the balances you owe on your account and provides funding for new transactions. We expect the trust to stop funding activity on our accounts. The trust also restricts our flexibility to fund activity on your account. Unfortunately, as a result, effective May 30th all Advanta Business Credit Card accounts, including your account, will be closed.

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