History of Providian Credit Card

Credit card is the metonym for the credit account. Basic difference of credit cards from charge cards is that the charge cards necessitate payment of full account balance every month. Contrary to this the credit card allows user revolving the balance at the cost of APR or interests charged against them. Normally it is the local credit unions or the banks that issues the credit cards and the average size is 8.5 cm X 5.4 cm.

With headquarters at San Francisco, Providian used to be one of the largest providers of credit cards in the entire United States. In October that year the company was bought by Washington Mutual and thus took over the responsibility of nearly 10 million card holders. While the headquarter of the company continued to be at San Francisco, its subsidiary offices were also opened at Texas, New Hampshire, and California.

Founded in 1997 by Andre Kahr who had earlier founded another credit card company by name of First Deposit Corp, the company became famous for selling credit to those who had poor credit histories. Annual percentage rate or APR for the company was very high and it went up to 29.9%. This policy of the company invited wide criticism as it made the borrowers poorer than before. On the other hand it made the company workers wealthier in comparison.

Lately the provider of Providian credit cards were in with a number of action suits against them by Class due to aggressive sales policies followed by them. In order to promote sales, the company offered several credit protection services to its card holders and that is what was challenged in the law suites. These suits ended with payment of 100 million dollars in form of compensation by Providian. It was the largest settlement by any credit card company.

In 2008, Washington Mutual that became a part of JPMorgan Chase bought at 1.6 million dollars. Shifting of the accounts was carried out smoothly without inconvenience to the credit card holders.