Nexcard Alert

I found out that my card will be closed tomorrow when I called NextCard's 800 number at 1-888-974-2265. You input your account number and normally you should get balance information. What I got was the following message:

"Due to the failure of next bank, it has become necessity to close your NextCard account . . . etc."

For those of you who interact with NextCard exclusively via the Internet I would call them Instead.

 

Yes George you have a point. I would not want to tell any close friends or family members that I worked for Merrick Bank.

I found a good site for checking out banks and credit card companies. It is
http://www.business.com/directory/l...aw/associations

I did a search on "Merrick Bank" and got this:

"February 9, 2001
ATTORNEY GENERAL HALTS CREDIT CARD SCAMS
Thousands of New Yorkers to Receive Refunds

In recognition of National Consumer Protection Week, Attorney General Eliot Spitzer today announced that his office has reached settlements with two firms accused of engaging in deceptive credit card schemes targeting consumers with poor credit histories.

"My office has been aggressively pursuing those who prey on low-income consumers seeking financial stability," Spitzer said. "Fraudulent offers of credit and other high-cost lending scams victimize those least able to afford it and further escalate the vicious cycle of debt problems."

In 1999 alone, Spitzerâ??s office received nearly 5,000 complaints about such financial schemes, making credit-related issues the third most prevalent consumer concern in New York State.

As part of his efforts to curb dubious credit practices, Spitzerâ??s office took action against Merrick Bank of South Jordan, Utah and Quebec-based National Credit Search (NCS).
Merrick Bank


In the winter of 1998, Merrick Bank commenced a marketing campaign in which it guaranteed to consumers looking to build a positive credit rating that they would be approved for an unsecured credit card with a $500 credit limit, and that no up-front security deposit or collateral was required.

Many consumers who paid Merrick a $90 non-refundable processing fee not understand that they had applied for a "pay-as-you-go" credit card. Consumers receiving this card immediately had their entire $500 credit limit charged to the account as a refundable "reservation fee" and were required to pay down this balance before they could make purchases with the card.

Spitzerâ??s office also objected to Merrickâ??s arrangement with Chase Manhattan Bank, which provided that those consumers who applied to Chase and were denied a platinum credit card with a low interest rate and a high credit limit had their applications automatically submitted to Merrick Bank. Credit cards were then issued to these consumers at an interest rate of as much as 29 percent and an annual fee ranging from $39 to $59.

Under the agreement, Merrick will not misrepresent its "pay-as-you-go" credit cards and will not open credit card accounts through any partner bank referral arrangements unless the arrangement is clearly and conspicuously disclosed in the application.

In addition, Merrick will refund the processing fee received to New York consumers who claim, in writing, that they were misled by Merrickâ??s marketing of its "pay-as-you-go" credit card, and will notify eligible consumers of the their right to a refund. "

 

The Federal Deposit Insurance Corp., the government agency that
has been overseeing the business since regulators seized the
accounts Feb. 7, waited until Tuesday to tell NextCard customers
their Visa credit cards would become worthless Wednesday.
Regulators closed NextCard's banking subsidiary because of
heavy loan losses.

Many NextCard customers received the news of the account
closures in e-mails sent Tuesday. Other customers won't find out
until they receive letters later this week. That means some
consumers might try to use their credit cards without knowing the
accounts have been closed, said FDIC spokesman David Barr.

San Francisco-based NextCard told regulators their customers
carry an average of three other credit cards, minimizing the
chances that someone unaware of Wednesday's account closure
won't have other financial options. About 300,000 of the affected
consumers haven't used their NextCard accounts for the past 90
days, Barr said.

"We tried to give as much warning as possible," Barr said. "It's
been a real juggling act for us to keep these accounts active."

Regulators had been trying to sell the accounts for more than four
months. The FDIC struck a deal last week to sell about 200,000
NextCard accounts to Utah-based Merrick Bank for $126 million.
Merrick Bank, a subsidiary of CardWorks Inc., will take over the
200,000 accounts by the end of September.

With the decision to close the remaining 800,000 accounts, the
taxpayer-backed FDIC expects to lose $300 million to $400
million on the failure of NextCard's bank.

http://ragingbull.lycos.com/mboard/boards.cgi?board=NXCD&read=7322

 

Yes that means you get to keep the card and will be transferred to the new bank. Whether that a good thing, who knows.