So just how bad is the credit card market right now?  It’s so bad that Advanta, the 11th-largest card issuer in the nation, has STOPPED ISSUING CREDIT.

Lending ceases June 10. Advanta will use as much as $1.4 billion to pay investors of its securitized credit-card loans part of the debt’s face value, the Spring House, Pennsylvania- based company said yesterday in a statement. Advanta said it’s preserving capital after charge-offs, or uncollectible debt, reached 20 percent on some cards as of March 31.

The company itself isn’t shutting down, mind.  It’s going to only be involved in collections from now until…sometime. Advanta deals almost exclusively in small-business credit cards, so it’s not altogether surprising that they would see a spike in defaults. Still, 20%. That sounds like a lot.

On the bright side, this will, in the short term, prevent Advanta from having to comply with new card industry regulations that are coming like a freight train of consumer outrage and Congressional busybodying, so that’s nice. Previously, new rules were set to take effect in July of next year, but now it looks like we’ll have a different, stronger set of rules taking effect…um…February of next year. Three whole months. Thanks a ton. One shudders to think of what previously unconsidered horrors will be visited upon the American consumer once these relatively tame abuses have been outlawed. I can almost see Bandit testifying before Congress, saying, “At no time were we made aware that we could not take vital organs in lieu of payment on past-due accounts. The committee will note that our collections department generally only harvested single kidneys and portions of livers, and were not even authorized to extract hearts, lungs, or testicles unless the account was over 120 days past due.”