Credit Card News

Wednesday, May 13, 2009

Advanta Credit Cards Closed for Business

By Joe Taylor Jr., CardRatings.com Reporter

Advanta credit card customers must find other ways to finance their small businesses, starting June 10th. Reacting to mounting losses from credit defaults, company officials decided to close down all of the firm's outstanding credit lines. In a press release, the company indicated that it took the move in advance of a June deadline that would cut off its own capital reserve.

The Philadelphia-based company offered business credit cards to entrepreneurs and to the owners of small companies with limited corporate credit histories. Credit analysts at major brokerages noted that Advanta credit cards remained tied to company owners' personal credit profiles. In contrast, competing corporate credit card issuers can collect business debts more aggressively, minimizing risk.

Like many industry watchers, CardRatings.com founder Curtis Arnold didn't expect such a drastic move. "I was shocked when I heard the news," said Arnold. "This will likely have a signficant ripple effect throughout the entire small business card market as Advanta has historically been a bellwether for the overall market."

Advanta's announcement marks the second major blow to small business credit card holders this month. Last week, JPMorgan Chase closed thousands of credit lines that had originally been opened as Washington Mutual business credit card accounts. Going forward, it is expected that an increasing share of small business owners will rely on personal credit cards to manage company finances.

If you need to replace a current card or are searching for a new card, please consider Business Cards from other issuers featured in our Business Credit Cards section such as American Express.

Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.

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Labels: Advanta credit card, corporate card, entrepreneur, JPMorgan Chase, small business credit card, Washington Mutual

Thursday, March 29, 2007

Beware of Credit Card Foreign Transaction Fees!

By Heshan Demel, CardRatings.com, Consumer Credit Researcher

Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late. So cardholders that travel overseas extensively need to be aware of foreign transaction fees.

Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.

Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.

Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).

This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.

A March 2007 survey of credit card issuers by CardRatings.com revealed the following foreign transaction fees:

American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list

Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly.

Update: You maybe entitled to a refund of any Foreign Transaction Fees imposed between Feb 1, 2006 and November 08, 2006. Please refer to www.ccfsettlement.com.

Bon voyage!

Heshan Demel- Heshan joined the CardRatings.com family in January 07 but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.

We welcome your comments about credit card issues in our popular credit forum!

CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

Labels: American Express, Bank of America, Capital One, Chase, Citibank, credit card fees, Discover, overseas credit card usage, Washington Mutual

Thursday, February 22, 2007

Credit Card Foreign Transaction Fees on the Rise

By Heshan Demel, Consumer Credit Researcher - CardRatings.com

Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late.

Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.

Despite the convenience associated with using cards out of the country, there are normally costs associated with the convenience. Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.

Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).

This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.

A recent CardRatings.com survey of credit card issuers revealed the following foreign transaction fees:

American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list

Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly. Bon voyage!

We welcome your comments about credit card and other money issues in our popular credit forum!

Heshan Demel- Heshan is new to the CardRatings.com family but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.