NextCard Folds (2/13/02) -------------------------------------------------------------------------------- FULL STORY: One of the most progressive credit cards ever launched bit the dust this week. San Francisco-based NextCard, the first Internet-centric VISA card, started unraveling in October when banking regulators questioned the way the issuer classified certain losses. Last Thursday the government finally dealt NextCard a death blow when it shut-down its Arizona bank, NextBank. As a result, Nasdaq halted trading in NextCard's stock Friday morning before the market opened, and NextCard has since stopped accepting new applications. NextCard's stock initially opened at $33.50 per share in May 1999 and climbed above $40 per share, but sank to as low as 12 cents per share last week. Launched in December 1997, NextCard had 1.2 million accounts and held approximately $2 billion in card loans at year-end 2001. After regulators got on its case last year, NextCard tried to find an acquisition partner and assemble a â??Capital Restoration Planâ??. Both efforts failed and the OCC seized the bank last week. While it may be a little complicated for the average Joe to understand, here's the scoop anyway. . . . The OCC determined that the bank was classifying some delinquent accounts sold into a securitization trust as fraud losses, although the delinquencies were actually attributable to credit quality problems. The assets were being repurchased by the bank at par, a practice that constituted sale of assets with recourse. This finding, together with significant accounting adjustments and the need for additional loan loss reserves, resulted in the bank becoming significantly undercapitalized. The FDIC has made arrangements for current NextCard cardholders to keep using their cards. www.cardtrak.com (news)
I was thinking of apply because they just sent me one by email. Do you think I should? Maybe a big bank like bofa will by them out.
George, I logged on to the account access and it's still working. I'm surprise that my billing cycle should be ended and it doesn't. I still owe them $18 for the dinner that I charged last month. I'm thinking I'm not using it anymore as soon a I paid off this month. Thanks for the news. Ron.
<second time, first one lost in cyber-space> DON'T WAIT, JUST DISPUTE ANY AND ALL INQUIRES FROM NEXT CARD...
I liked the picture of the grave tombstone with the NEXTCard banner. Interesting that FDIC has allowed us to continue using the card. GEORGE, LOL, by us having this card, do we get cash advances directly from the FDIC now....LOL... aaarrrfffff - still have it - with $0 balance - arf dogman
YUP - they can reimburse the poor dogs that carried the now politically defunct GARY CONDIT VISA CARD....... Don't you love the way I can tie back old concepts - aroooooo! hope the email finds you in good spirit.. dogman
