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NEW YORK (Fortune) -- The credit card business has grown so wretched
that one major issuer is clipping its customers' cards and giving its
investors a haircut. Advanta,
the nation's No. 14 card issuer and a top lender to small businesses,
said last week it will shut down its card business to stem losses. The
move is a momentous one, because credit cards bring in nearly all
Advanta's revenue. The company will close customer accounts
next month, leaving a million borrowers looking for credit at a time
when lenders are pulling back. And Advanta's small-business customers
aren't the only ones in limbo: So are the investors whose bond
purchases financed Advanta's expansion over the past decade. The
firm says notes due to mature next month won't be repaid in full on
schedule. Advanta is offering to buy some bondholders out at a roughly
30% discount. Read the whole story at http://money.cnn.com/2009/05/18/news/cards.advanta.fortune/index.htm?section=money_latest
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