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To: patron_anejo_por_favor who wrote (178714)	7/10/2002 11:34:17 AM
From: TheStockFairy	Read Replies (1) \| Respond to of 436258

NextCard cuts off credit card holders Wed Jul 10,11:25 AM ET Troy Wolverton Hundreds of thousands of NextCard customers will no longer be able to use the troubled company's credit cards as of Wednesday. The company began notifying customers via e-mail in recent days that their cards will soon be defunct. A note on NextCard's Web site attributed the problem to the closure by federal regulators of the company's NextBank subsidiary, which issued the credit cards. "There are no funds to keep the credit cards operation going. Therefore, your account (will be) closed on July 10, 2002 through no fault of yours," the company said in its note. NextCard representatives did not return calls seeking comment. A representative of the Federal Deposit Insurance Corporation (FDIC) confirmed that 800,000 credit card accounts would become defunct as of Wednesday, the Associated Press reported. The NextCard Visa card was part of the Internet boom. Launched in 1997, NextCard aggressively marketed the credit card over the Internet as a solution for e-commerce, taking applications only online. Members whose accounts are shut down will no longer be able to charge items on their cards or get cash advances, NextCard said in its note. However, affected customers will continue to responsible for their outstanding balances. Government regulators shut down NextCard's banking operation in February after the company said that a liquidation of its assets would not pay off its existing liabilities. The following month, the company laid off 90 percent of its work force and its stock was delisted from Nasdaq. Last week, the FDIC, which holds NextCard's assets, sold a portion of the company's accounts for $126 million to Utah-based Merrick Bank. Unable to find a buyer for the remaining accounts, the FDIC estimated that the closure of NextBank would cost it between $300 million and $400 million. FDIC representatives did not return calls from News.com seeking comment. NextCard's signature product was the NextCard Visa. Visa was notified by the FDIC that NextBank would cease all operations on Wednesday, Kelly Presta, vice president of Visa USA, said in a statement Tuesday. Although the 200,000 accounts purchased by Merrick will remain usable, Presta said, the remaining NextCard Visa cards will become defunct. Affected cardholders will be able to get information on obtaining a replacement card through the financial giant's Web site, he said. "Visa is working to ensure that any inconveniences to cardholders will be kept to a minimum," Presta said. In 1999, NextCard teamed with Amazon.com to issue a co-branded credit card and drew a $22.5 million investment from the e-commerce leader. By the end of last year, the company had 1.1 million credit card accounts. But like other dot-com companies, NextCard bled cash, accumulating $390.2 million in losses by the end of last year. By last fall, the company was searching for a buyer.