Payment Card News

Cancelled Cards

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The FDIC is pulling the plug on 440,000 BestBank VISA credit cards this week. However about 13,000 BestBank card accounts, mostly secured VISA cards, will remain open until a buyer is found. The card accounts to be closed were those involved in a travel club program. The bank offered a VISA card with a $600 credit line if the applicant agreed to charge $500 in dues for a related travel club. The cards were offered to all consumers including those with a poor credit history. The Colorado bank failed last July and was taken over by the FDIC after it was discovered that its credit card program caused the bank to become severely undercapitalized. In its efforts to unload BestBanks’ cards the FDIC sent out portfolio details to 132 interested parties and received a total of six bids. One deal was accepted and was set to close Jan 29. However, after two extensions, the FDIC decided last week to withdraw the portfolio from the marketplace. Civil lawsuits and a criminal investigation continues.

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