Advanta Profile

Spring House, Pennsylvania-based Advanta specializes in providing financial services to small businesses. Advanta is currently only based in the United States with additional offices in New Jersey, Delaware, and Utah. The company employs around 875 workers.

The CEO of the company is Dennis Alter. Alter has held the position since 1971 and is the son of the company's founder, Jack Alter. For three years before joining the company, he worked as a school teacher in Philadelphia. The company's current president, Bill Rosoff, has been with the company since 1996. For more than twenty years, he acted as Advanta's legal advisor from his position with Wolf, Block, Schorr, and Solis-Cohen.

Company History

In 1951, Jack Alter used $30 to establish what would become Advanta. At the time, however, the fledgling financial firm was known as Teachers Service Organization (TSO) and was operated from Alter's bedroom. The purpose of TSO was to provide loans to teachers. As Alter knew since teaching was his career, educators often faced an uphill battle when taking out loans from traditional banks.

Alter realized that teachers also had difficult applying for loans through banks because of the hours of operation. In response to this problem, he began using direct marketing, such as sending articles to teachers, and telephone marketing. This was a long time before companies, such as Capital One, would use direct marketing as their primary means of identifying customers.

During the 1960's, TSO continued to find new ways to meet customers' needs. They introduced “payment holidays” for clients which could be used during the summer when many teachers were not working and short-term loans which could be used when teachers went on strike during contract disputes. During this period, they also formed relationships with the National Education Association and the American Federation of Teachers in order to more effectively reach their target audience.

In 1971, Alter retired and turned the reigns of TSO over to his son, Dennis. With the change in leadership came a number of other changes, particularly during the 1980's. In 1981, TSO began providing similar services for nurses and court reporters. Four years later, Dennis Alter went public with the company for the first time.

During the 1980's, TSO also acquired Colonial National Bank (which eventually became Advanta National Bank) and Apex Mortgage (this was later sold for for over $1 billion).

In 1988, TSO's name was changed to Advanta. After this, the company became one of the first to open its credit card and mortgage receivables up to investors.

Advanta and Credit Cards

When TSO purchased Colonial National Bank in 1982, they entered the consumer credit card business. Through the use of a national marketing campaign, the company was able to expand its number of credit card holders.

In the middle of the next decade, Advanta conducted a joint marketing program with the Royal Bank of Scotland to begin offering credit cards in England. In the United States, Advanta began providing new credit cards which would appeal to their customers, such as a Gold Mastercard that didn't charge an annual fee.

During the the 1990's, Advanta also began offering credit cards for small businesses. The issued cards even included the name of the small business. This division grew quickly. Credit card receivables for small businesses reached $1 billion in 1998 and grew to $1.6 billion in 2000.

The small business credit card division was so successful that in 1997 Advanta sold off its consumer credit card division for $1.3 billion.

In 1999, Advanta started using the Internet to extend their services to their business customers. For example, they offered 24/7 customer service through their web site and automated the credit granting decision process with an online application.

Philanthropy

Advanta has invested $12 million in grants to communities to support arts, education, and sports programs in local areas through the Advanta Foundation since 1990. They are also a sponsor of The Women's Sports Foundation which was created in 1974 by Billie Jean King. They are also a sponsor of the Arthur Ashe Youth Tennis and Education foundation.

In 2006, Advanta also started the Advanta Small Arts Support Program which will provide more than $500,000 in grants to arts programs in communities in Philadelphia, New Jersey, and Delaware.

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