A question many cardholders are asking is “Why is Advanta freezing my credit card account from new charges and transactions?” Well, don’t take it personally, it’s not just you. On June 10th, 2009, Advanta will be freezing its entire credit card portfolio… preventing new charges, balance transfers, cash advances, or any other transaction on all of its cardmembers’ accounts.

Why? Simply put, too many customers are defaulting on their bills. Advanta only issues small business credit cards, and as we know, many of these businesses have been hit especially hard by the economic downturn.

It is unclear as to what Advanta plans next. They were offered TARP funds months ago, but refused. Many feel this was an irresponsible decision, being that even then, their stock was trading for pennies and they were sustaining out of control losses.

The rewards card was one of the most popular credit cards issued by Advanta

Cardmembers that carry a balance or are dependent on using their cards are now left in the dark. They have just a few weeks to find a replacement card. Unfortunately, small business credit cards have dried up and it is extremely difficult to get one now, and if you do qualify, the credit limits are a fraction of what they normally would be. In turn, many small business owners are having to open personal credit cards as their replacements. For those that pay their balances in full each month, the best charge cards may be a good option to consider. For those that carry balances, unfortunately all of the best 0% balance transfer offers have been watered down significantly. I suppose the best solution would be to take what you can get and hopefully in a few months, you will be able to change it over to a better balance transfer offer.

Originally written May 2009