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View Full Version : Very interesting article on Target stores UPDATE p.5


disneysteve
07-10-2006, 08:01 AM
http://warrenreports.tpmcafe.com/blog/warrenreports/2006/jul/08/on_target

"Businessweek just reported that Target’s latest statement shows that three-quarters of their profits didn’t come from the sale of goods—they came from subprime lending. That’s three out of every four dollars of profit come from interest, late fees, over-limit charges and penalty fees."

Just in case you weren't convinced of the credit problems in this country.

sap1227
07-10-2006, 08:05 AM
http://warrenreports.tpmcafe.com/blog/warrenreports/2006/jul/08/on_target

"Businessweek just reported that Target’s latest statement shows that three-quarters of their profits didn’t come from the sale of goods—they came from subprime lending. That’s three out of every four dollars of profit come from interest, late fees, over-limit charges and penalty fees."

Just in case you weren't convinced of the credit problems in this country.

That is crazy! Thanks for that info, I am shocked!!!

vegasnative
07-10-2006, 08:08 AM
Same with Sears, according to Dave Ramsey. His book says that Sears doesn't have to sell any merchandise at all, they make their money on their revolving credit accounts. He says Sears is just a lender with a store front and some items out there to sell.

mjbaby
07-10-2006, 08:08 AM
http://warrenreports.tpmcafe.com/blog/warrenreports/2006/jul/08/on_target

"Businessweek just reported that Target’s latest statement shows that three-quarters of their profits didn’t come from the sale of goods—they came from subprime lending. That’s three out of every four dollars of profit come from interest, late fees, over-limit charges and penalty fees."

Just in case you weren't convinced of the credit problems in this country.

Interesting.

In addition to pointing out credit problems, I think the article is a useful illustration of the nature of business in general. It's often been said that McDonald's isn't in the burger business, it's in real estate and that car dealerships don't aren't in the car business, but rather are in the car repair business. So I don't think it's terribly surprised to learn that Target's primary money maker is something other than selling whatnot.

DVCLiz
07-10-2006, 08:23 AM
Every time I go to Target and get the "Would you like to save 10% today?" question, I say no pleasantly. Once a cashier tried to push it a little - I had a big cart full and she made a comment about how much I could save. I said, "What's the interest rate on that card?" She didn't even know what I was talking about. I said, "If you'll give me a Target card with an interest rate of 5% I'll take it." Of course it was something outrageous like 21.99% or something. No Target card for me!!!!

tweetylori
07-10-2006, 08:27 AM
I took advantage of their 10% offer recently when buying a cartload full. Then when the card came, I just cut it up, didn't activate it, and paid the balance in full when the bill came. Otherwise, saving ten percent to pay 22 doesn't make any sense to me. I think they're counting on us forgetting or not figuring out that part of the game.

disneysteve
07-10-2006, 08:29 AM
Every time I go to Target and get the "Would you like to save 10% today?" question, I say no pleasantly. Once a cashier tried to push it a little - I had a big cart full and she made a comment about how much I could save. I said, "What's the interest rate on that card?" She didn't even know what I was talking about. I said, "If you'll give me a Target card with an interest rate of 5% I'll take it." Of course it was something outrageous like 21.99% or something. No Target card for me!!!!
Of course, if you (generic you, not you Liz) limited your buying to what you could actually afford (imagine that) and paid the credit card bill in full each month, it wouldn't matter if the interest rate was 1000%. We use our credit cards almost daily, but I honestly have no idea what the interest rate is on any of our cards. It might be 5%. It might be 25%. I've never even thought to look.

disneysnowflake
07-10-2006, 08:32 AM
I get asked every time I got to Target if I want their card.
I'm told if I get one I'll be helping my local school and get 10% back today.
They'll even offer me to save 10% if I'm only buying a 50 cent pack of gum. Yeah, I'll take the card to save 5 cents off my gum. lmbo.

Sears have ridiculous interest rates.

Unfortunately, I have a family member who has been paying on her stove, refrigerator, dishwasher and washer/dryer for over 15 years now. She STILL owes money on it. She says she just makes the payment and doesn't think about it. What will happen if her 15 year old appliance stop working? She'll be paying on broken down ones and charge new ones. Crazy.

Alicnwondrln
07-10-2006, 08:37 AM
wow thats crazy

mickeyfan2
07-10-2006, 09:06 AM
This is not unexpected but not a good thing either. I too agree that if you pay the card off each month the interest rate does not matter.

Chicago526
07-10-2006, 09:23 AM
In fairness to the cashiers, they HAVE to ask, no matter what you buy. I always tell them I already have one. That's technicly true, I have their original credit card that I got when I worked for them 10 years ago, I never use it. Since they've changed their card several times since then I don't even know if it would work if I tried to use it.

The only department store cards that I have and still use are Kohls, JcPenney's, and Eddie Bauer. I only use them when I have a coupon that's good when you use the card, then I pay it off when the statement comes in. DH and I are working too hard at paying off past mistakes to rack up more debt again at 24.9%!

dvcgirl
07-10-2006, 09:34 AM
Amazing, but certainly not surprising. People are paying so much in junk fees and in many cases they have no idea....or they just pay it.

Free4Life11
07-10-2006, 09:38 AM
In fairness to the cashiers, they HAVE to ask, no matter what you buy. I always tell them I already have one. That's technicly true, I have their original credit card that I got when I worked for them 10 years ago, I never use it. Since they've changed their card several times since then I don't even know if it would work if I tried to use it.

Thanks! I work at a theatre and our manager has gone ballistic -- if you don't upsell the drinks, you will be suspended for one MONTH. I think it's a little ridiculous...so I'm sure there could likely be penalites for not offering the credit card.

My mom got their credit card and what I didn't realize is that it's not just a store card. It actually came in handy -- my parents were at a wedding and their card wouldn't work at the hotel! Well my mom happened to have her Target card with her and it came in handy.

I think the store cards are good if you pay them off. I just got an American Eagle card and since I got it the week after my birthday I got 20% off, plus I used their All Access Pass thing to earn points. On a side note, I'm really impressed with their clothes -- good quality, trendy, and way better prices that some of the other stores.

katerkat
07-10-2006, 09:59 AM
I'm not suprised - the interest on our Best Buy credit card is 22.15%. If we were to miss one payment or even be a day late, our deferred interest is already over $1K. The charges have been on the card for about 18 months. (We have 0% interest and trust me - there will be NO late or missed payments.)

mjbaby
07-10-2006, 10:02 AM
I think the store cards are good if you pay them off. I just got an American Eagle card and since I got it the week after my birthday I got 20% off, plus I used their All Access Pass thing to earn points. On a side note, I'm really impressed with their clothes -- good quality, trendy, and way better prices that some of the other stores.


Your raise a good point, Free4Life11. I have a Talbot's card since most of my clothes are from that store/catalog. Their rewards program rocks ($25 gift card with every $500 purchase) and you even earn points for buying gift cards. Plus, their clearance prices are just amazing and I earn a special 10% discount off of my entire purchase in the month of my birthday. I routinely make a Christmas Day online purchase for pennies after using clearance pricing, my December-birthday discount and whatever gift cards I've earned that year (usually one, sometimes two). Brings the cost per item down very low. And, of course, paying off that bill when it arrives in January. Can't beat it.

summerrluvv
07-10-2006, 10:02 AM
I took advantage of their 10% offer recently when buying a cartload full. Then when the card came, I just cut it up, didn't activate it, and paid the balance in full when the bill came. Otherwise, saving ten percent to pay 22 doesn't make any sense to me. I think they're counting on us forgetting or not figuring out that part of the game.

If you pay the bill in full why does it matter what the rate is? They give me points for each dollar spent toward percent off coupons and contribute something like 2% of my purchases to my son's school, so I really like my Target Card. I spend so much money there that it only made sense to get their CC.

summerrluvv
07-10-2006, 10:05 AM
I'm not suprised - the interest on our Best Buy credit card is 22.15%. If we were to miss one payment or even be a day late, our deferred interest is already over $1K. The charges have been on the card for about 18 months. (We have 0% interest and trust me - there will be NO late or missed payments.)

Don't you have to pay the entire balance before the 18 months is up or you are socked with that 1k in interest?

katerkat
07-10-2006, 10:12 AM
Don't you have to pay the entire balance before the 18 months is up or you are socked with that 1k in interest?

No, we got a 36 month deal with the 0% - otherwise we never would have bought the TV!

crisi
07-10-2006, 10:12 AM
If you pay the bill in full why does it matter what the rate is? They give me points for each dollar spent toward percent off coupons and contribute something like 2% of my purchases to my son's school, so I really like my Target Card. I spend so much money there that it only made sense to get their CC.


Since the practices can be predatory, you just have to be careful. Some credit card companies don't book the payment the day its made. Some have short billing cycles - you'd need to mail the check before you got the bill in order to pay on time.

I don't pay my Disney Visa in full every month, I send them money every week and true up every month. That makes sure I can't get hit with a late charge for a check they didn't credit.

dodukes
07-10-2006, 10:35 AM
No, we got a 36 month deal with the 0% - otherwise we never would have bought the TV!

Just make sure you rally read the fine print, that is the reason i got my bb card, cuz its great to have at least 3 months to pay for everything interest free, however if you are even one day late all that back interest charges right up. I saved over $300 on my comp on interest when i got it, right now im up to almost $400 saved on interest and have till 1-27-07 to pay it off from this past xmas that i bought myself a laptop. The way i look at cards liek this and Rooms to go that offer this, am i in debt, well yes ofcourse!, is it costing me naything, NO! and i get to spread my balance and pay slowly every month. Its also usefull if you know how they apply payments to your BB card in general I got hte trick down and up until this year on a few minor purchases that i just didnt bother with (long story) i have never accrued interest on anything so i am probably not one of their best customer..lol(even tho i am)

sk!mom
07-10-2006, 10:45 AM
Since the practices can be predatory, you just have to be careful. Some credit card companies don't book the payment the day its made. Some have short billing cycles - you'd need to mail the check before you got the bill in order to pay on time.

This is a very good point. We use reward cards for everything and pay them in full every month. We have done this for years without any mistakes until this Spring. I made a mistake in my payment and dropped a few dollars from the payment- basically a typo. Due to my mistake we had a large finance charge. DH is an accountant and he was amazed at the creative bookkeeping that they use to arrive at a large finance charge from a mistake of a few dollars. The happy ending was that I called and they agreed to waive the finance charge but I was reminded to make those payments really carefully from now on.

This article is shocking and illustrates why so many people are in tough financial shape. Almost anything charged at Target would be used up or worn out before you managed to pay for it if carry a balance on their card. You could be paying for a bottle of Tide years from now. :confused3

jeankeri
07-10-2006, 11:03 AM
When my DH and I were getting out of debt (over $40,000 in CC from his 2 1/2 years in grad school with no employment, raining our 2 babies at the same time) we went cash/debit card only until the cards were all paid off. Every month I would add up all the intrest we were paying and think "We could fund our kids college funds with this $$". It was outrageous, but in 3 years we were out of debt, and now we are getting some of our $$ back with our reward card incentives. My DS9 once said, "Wow, they give you great things for using their cards" :rotfl2: . I gave him a simplified explanation of who was really paying for all the incentives. :sad2:

MyGoofy26
07-10-2006, 11:26 AM
Since the practices can be predatory, you just have to be careful. Some credit card companies don't book the payment the day its made. Some have short billing cycles - you'd need to mail the check before you got the bill in order to pay on time.



And don't forget the ones that have a due date and TIME. I've seen reports of some that have to be in by 7AM on the day it's due, so even if you have your payment on the due date. .. you're socked with a late fee because they have a due time before regular business hours.


Back to the original post. . . shocking, but not surprising, LOL. If that makes sense. I'm not at all saying that this relieves people from personaly responsibility, but I think seeing these types of numbers show that these companies are also responsible. . . they complain when people default, but that's exactly what they are relying on! It's not out of kindness and sympathy that they're in the subprime lending business. . . if you make most of your profit on late fees, interest, etc then you're going to offer your "services" to the people who are historically "sloppy" with their bills, histories of lates and such.

mickeyfan2
07-10-2006, 11:38 AM
Now if most of the profit is from late fees and interest are they included all the interest accurred or only the amount that they received in payments?

patsal
07-10-2006, 11:45 AM
I only have department stroe cards for the perks--6 mos. interest free from Sears on major appliances--I only buy what I can pay off in 6 months (actually the $$ is in savings to pay for the items, but I may as well earn interest and let someone lend me $$ for free. The same with Lowe's and Home Depot 12 mos. same as cash. As for things like Old Navy and Fashion Bug I do it for the bucks back--again pay in full, but love those discounts. As far as the OP, Wow--I knew they made $$ off the CC's but I had no idea that it was that much!

MrsPete
07-10-2006, 11:47 AM
http://warrenreports.tpmcafe.com/blog/warrenreports/2006/jul/08/on_target

"Businessweek just reported that Target’s latest statement shows that three-quarters of their profits didn’t come from the sale of goods—they came from subprime lending. That’s three out of every four dollars of profit come from interest, late fees, over-limit charges and penalty fees."

Just in case you weren't convinced of the credit problems in this country.I'm shocked. I had no idea that credit cards were their bread-and-butter.

This makes me want to stay away from Target (I'm not a fan anyway -- with the exception of consumable mechandise, most of what they sell is "one season" stuff anway -- things that are used briefly, barely noticed, then tossed into the yard sale box); however, they're not the only ones playing this game, so staying away from them would only give my business to a different predator.

nbodyhome
07-10-2006, 11:51 AM
I am shocked, no wonder they push the credit cards so hard. I don't have one - I may have in the distant past (like 10 years ago).

I don't normally use credit cards unless I am paying them off right away - I just got the US Airways card to get airmiles, but I make the payment online everytime I use it (I am allowed to make payments every day). If I was needing to use a card for something that I wasn't able to pay off, it'd be my Discover (much less interest).

MrsPete
07-10-2006, 11:54 AM
Every time I go to Target and get the "Would you like to save 10% today?" question, I say no pleasantly. I always say, "Sure, go ahead and take off 10% -- just don't talk to me about credit cards." I know the cashiers are told to push the cards (I just didn't know how much $$$ the company was making from them), and it's not the fault of the minimum wage person at the register; still, the practice is horrible.

The ones I really find offensive are the JC Penny cashiers (though it has nothing to do with credit cards): they always say, "You saved ___ by shopping with us today." That's not true: generally when I shop at Penny's I buy nothing that I really need, so I've saved nothing -- I've spent money. Sometimes I'll reply, "No, I didn't save anything -- I spent ____ amount." They always look at me like I have three heads, and I can tell that the clerk -- especially if it's a young clerk -- genuinely doesn't understand that you don't save by buying new clothes.

MrsPete
07-10-2006, 11:57 AM
If you pay the bill in full why does it matter what the rate is? They give me points for each dollar spent toward percent off coupons and contribute something like 2% of my purchases to my son's school, so I really like my Target Card. I spend so much money there that it only made sense to get their CC.I have two credit cards. I get "cash back" deals from one and "points" from the other. However, I pay the balance in full every month; if I were paying interest, I'd be getting back pennies on the dollar and it wouldn't make sense.

If you're careful with your credit cards, you really can get completely free stuff from them. However, most people don't do that. I've read that the average person spends 30% more if he/she is paying with a credit card. Add interest to that, and it's a recipe for trouble.

MrsPete
07-10-2006, 12:04 PM
My DS9 once said, "Wow, they give you great things for using their cards" :rotfl2: . I gave him a simplified explanation of who was really paying for all the incentives. :sad2:If every kid had a similar explanation, we wouldn't be heading towards a huge credit crisis. I really think most people who are in credit card debt don't grasp just how much they're throwing away each month.

nbodyhome
07-10-2006, 12:09 PM
If you're careful with your credit cards, you really can get completely free stuff from them. However, most people don't do that. I've read that the average person spends 30% more if he/she is paying with a credit card. Add interest to that, and it's a recipe for trouble.

I have also heard that people spend 30% more with credit cards, so I try to be really careful that I am not doing that (and not buying more than what I'd planned).

I find it really annoying also when the cashiers ask about the credit cards - but worse was at a Target, when a cashier came up to me while I was shopping and asked if I wanted to sign up. I wrote to the store manager about that.

summerrluvv
07-10-2006, 12:11 PM
Since the practices can be predatory, you just have to be careful. Some credit card companies don't book the payment the day its made. Some have short billing cycles - you'd need to mail the check before you got the bill in order to pay on time.

I don't pay my Disney Visa in full every month, I send them money every week and true up every month. That makes sure I can't get hit with a late charge for a check they didn't credit.

I pay my bill either at the store or online. Never had a problem yet ;)

summerrluvv
07-10-2006, 12:15 PM
I have also heard that people spend 30% more with credit cards, so I try to be really careful that I am not doing that (and not buying more than what I'd planned).

I find it really annoying also when the cashiers ask about the credit cards - but worse was at a Target, when a cashier came up to me while I was shopping and asked if I wanted to sign up. I wrote to the store manager about that.

Why would you write to the store manager about that? You were on their property and they solicited you for one of their products, big deal. :confused3

MyGoofy26
07-10-2006, 12:18 PM
Why would you write to the store manager about that? You were on their property and they solicited you for one of their products, big deal. :confused3


I don't know. . . I could imagine complaining if it happened to me. It may not make them stop, but if management is aware of how uncomfortable it makes people in their store and that maybe people will avoid that store if they fear being accosted by the credit patrol in the aisles, they might back off a little.

MrsPete
07-10-2006, 12:24 PM
I don't know. . . I could imagine complaining if it happened to me. It may not make them stop, but if management is aware of how uncomfortable it makes people in their store and that maybe people will avoid that store if they fear being accosted by the credit patrol in the aisles, they might back off a little.I agree. It's irritating enough to be hounded at the register, but to be interrupted while you're walking around the store shopping . . . if the manager knows the practice is annoying to the customers, he's likely to stop it.

summerrluvv
07-10-2006, 12:26 PM
I don't know. . . I could imagine complaining if it happened to me. It may not make them stop, but if management is aware of how uncomfortable it makes people in their store and that maybe people will avoid that store if they fear being accosted by the credit patrol in the aisles, they might back off a little.

I guess I feel like it only takes 2 seconds to say no thanks, rather than however long it would take to actually complain to management/write a letter, etc. about it. If someone offers me a CC, I say no thanks and that's the end of it. Just like when someone is selling candy bars or girl scout cookies outside a store or asking for donations at the register. I simply say no. I couldn't imagine complaining about it. I'm not sure why anyone feels uncomfortable saying no thanks, but eh, to each their own ;)

mickeyfan2
07-10-2006, 12:33 PM
I guess I feel like it only takes 2 seconds to say no thanks, rather than however long it would take to actually complain to management/write a letter, etc. about it. If someone offers me a CC, I say no thanks and that's the end of it. Just like when someone is selling candy bars or girl scout cookies outside a store or asking for donations at the register. I simply say no. I couldn't imagine complaining about it. I'm not sure why anyone feels uncomfortable saying no thanks, but eh, to each their own ;)
This is what I do. "No thank you I am not interested".....end of conversation. Works with telemarketers on the phone too. After saying that I hang up the phone.

crisi
07-10-2006, 12:41 PM
I guess I feel like it only takes 2 seconds to say no thanks, rather than however long it would take to actually complain to management/write a letter, etc. about it. If someone offers me a CC, I say no thanks and that's the end of it. Just like when someone is selling candy bars or girl scout cookies outside a store or asking for donations at the register. I simply say no. I couldn't imagine complaining about it. I'm not sure why anyone feels uncomfortable saying no thanks, but eh, to each their own ;)

See, I LIKE it when they pitch these cards. I can say "no thanks." But every idiot who gets the card and gets stuck with huge interest and late fees is keeping Target profitable, and letting them sell stuff cheaper to people like me.

Target has a profit margin goal. If they don't make it off credit cards, they'll make it somewhere else. That is the way businesses work. I'd rather they make their profit off someone other than me.

I feel the same way about extended warrenties. Go ahead and pitch away. Its just making the product cheaper for me.

nbodyhome
07-10-2006, 12:43 PM
I agree. It's irritating enough to be hounded at the register, but to be interrupted while you're walking around the store shopping . . . if the manager knows the practice is annoying to the customers, he's likely to stop it.

I was in their store shopping - and I don't appreciate being solicited as I'm shopping. I've gotten used to it at the registers, but I let them know that I'd not continue to shop there if I was approached as I was shopping again.

Each of us has something that irritates us more than it will something else. Solicitations of nearly any kind tend to rankle me. I have had some bad experiences with it - like when I have called AOL to report a problem and they try to sell me something. And especially when Bellsouth messed our phone lines up (they cancelled us when a new tenant here gave our address by accident, and I didn't know that our phone was out because we were essentially sharing it with the other person) and they had to re-sign me up. I was already upset, and they kept trying to upsell me - even as I told them to please not do that. Two weeks later, we cancelled.

I was so happy when I called the US Air Mastercard (even though it was a problem that they caused) when they didn't try to sell me anything. Then a couple of nights later, the issuing bank called with an "offer". (sigh)

nbodyhome
07-10-2006, 12:48 PM
I don't know. . . I could imagine complaining if it happened to me. It may not make them stop, but if management is aware of how uncomfortable it makes people in their store and that maybe people will avoid that store if they fear being accosted by the credit patrol in the aisles, they might back off a little.

I am doing them a favor by shopping there, and I like to do it with minimal intrusion. :) It is why I don't act like a carnival barker when I do demos - some people are very open to sampling, some people find it intrusive - and you can tell who feels that way because some won't even look at you.

I also find it uncomfortable when I go to a store and people are outside the only available doors, trying to sell things. Not everyone bothers me, but some do - I went to Publix a week ago and a couple of people selling something were like "hey, you lady". Ugh, it's like chalk on a chalkboard to me.

chipmunkfan
07-10-2006, 01:30 PM
Not only does Target make alot of money from consumers, but also from their vendors. They charge fees for everything....a few hundred dollars for a shipment not arriving on time. A couple of hundred for an item being out of stock...and on and on. It's amazing how many fines they charge their vendors, which usually adds up to a million or so in a year. This is only from one vendor.......

disneysteve
07-10-2006, 01:42 PM
If every kid had a similar explanation, we wouldn't be heading towards a huge credit crisis. I really think most people who are in credit card debt don't grasp just how much they're throwing away each month.
I sat down with DD last year. We do little "Financial Academy" sessions. She really gets a kick out of them. I made up a hypothetical shopping trip and discussed options for payment: cash, check, debit card and credit card. We went over the pros and cons of each. And I particularly focused on the CC. I used an online calculator to show her the effect of not paying the full balance in full and how much interest she would pay and how long it would take to repay the balance if you just pay the minimum each month. It was quite eye-opening for her. I even heard her telling my mom about it a couple weeks later.

arminnie
07-10-2006, 02:03 PM
Of course, if you (generic you, not you Liz) limited your buying to what you could actually afford (imagine that) and paid the credit card bill in full each month, it wouldn't matter if the interest rate was 1000%. We use our credit cards almost daily, but I honestly have no idea what the interest rate is on any of our cards. It might be 5%. It might be 25%. I've never even thought to look.

I totally agree.

my3kids
07-10-2006, 02:04 PM
Talking about companies not posting payments until late...I had a situation happen this month that I suspect was based in fraud on their part, but I don't know for sure.

I was checking my checkbook online as i normally do but a check cleared for a diffeent amount than I wrote it for( less) I pulled up the check copy and sure enough it was written for the higher amount but cleared for a lower amount. I called the company to see how much my last payment was...sure enough, they credited my account for the lower figure. I was to fax a copy of the check for them to 'research.'

It just got me wondering if places do that in hopes of someone paying charges such as finance or late fees that they shouldn't have had.

mickeyfan2
07-10-2006, 02:19 PM
Talking about companies not posting payments until late...I had a situation happen this month that I suspect was based in fraud on their part, but I don't know for sure.

I was checking my checkbook online as i normally do but a check cleared for a diffeent amount than I wrote it for( less) I pulled up the check copy and sure enough it was written for the higher amount but cleared for a lower amount. I called the company to see how much my last payment was...sure enough, they credited my account for the lower figure. I was to fax a copy of the check for them to 'research.'

It just got me wondering if places do that in hopes of someone paying charges such as finance or late fees that they shouldn't have had.
This is a result of a person keying the check in wrong at the destination. Your bank can only clear it for the lesser of the amount on the check or the amount keyed in. This happend to us once many years ago. We call to get the payoff price on our vehicle. It was like $1234.56 but the check cleared for $123.45. Thus the car was not paid off. We contact the company and our bank. We had to write a check for $1234.56-$123.45 and did not occur any additional fees or interest.

dvcgirl
07-10-2006, 02:22 PM
Interesting.

In addition to pointing out credit problems, I think the article is a useful illustration of the nature of business in general. It's often been said that McDonald's isn't in the burger business, it's in real estate and that car dealerships don't aren't in the car business, but rather are in the car repair business. So I don't think it's terribly surprised to learn that Target's primary money maker is something other than selling whatnot.

This is very true. And furniture stores aren't in business to sell furniture, but rather to loan you money at a very high percentage. Best Buy and Circuit City make their money on interest, fees, and their biggie is extended warranties. Everything on their floor and in their inventory are loss leaders....they're just selling that stuff to con you into the warranties.

Still, it's amazing (at least to me), that Target, essentially a discount retailer /grocer is making 3/4 of its profits from interest and junk fees. Where on earth are we headed in this country?

mt2
07-10-2006, 02:37 PM
I sat down with DD last year. We do little "Financial Academy" sessions. She really gets a kick out of them. I made up a hypothetical shopping trip and discussed options for payment: cash, check, debit card and credit card. We went over the pros and cons of each. And I particularly focused on the CC. I used an online calculator to show her the effect of not paying the full balance in full and how much interest she would pay and how long it would take to repay the balance if you just pay the minimum each month. It was quite eye-opening for her. I even heard her telling my mom about it a couple weeks later.

Can you give me the site or pm me with it? I've been trying to do this with my DD's without minimal success. They are visual learners like me. Thanks

disneysteve
07-10-2006, 02:48 PM
Can you give me the site or pm me with it? I've been trying to do this with my DD's without minimal success. They are visual learners like me. Thanks
I used the calculators at bankrate.com. That was just to show the effect of interest. All the other stuff I mentioned I did on my own.

DVCLiz
07-10-2006, 03:19 PM
Wow, I forgot I posted to this thread!!

Yes, I agree if you pay off the card in full it doesn't matter what the interest rate is. I just disagree in principle with those high-interest cards, especially in places like Target where people do a lot of their daily shopping. I can afford to pay off my bill each month, no matter how much I run up, but my friend can't. She keeps a Target card loaded and pays handsomely. She's been through a divorce, lost her house, etc. so she's not in shape yet to be able to pay off her credit cards in full.

PS - I love Target!!!! I buy all of my cleaning supplies and a lot of household storage (wooden coat hangers, etc.) there, as well as small electronics, beauty and health aids, and even some groceries. I'd be very sad without my Target - I just don't want their credit card!

arminnie
07-10-2006, 03:39 PM
Can you give me the site or pm me with it? I've been trying to do this with my DD's without minimal success. They are visual learners like me. Thanks

There's a calculator on the page I've referenced that you input the amount of the purchase, interest rate, and how much you intent to pay per month.

It calculates for you how much interest is accrued and what the item ends up costing you.

http://www.usa.visa.com/personal/student/credit_101/calculate_your_payments.html?it=l2|/personal/student/credit_101/take_credit_quiz%2Ehtml|Calculate%20Your%20Payment s


example 23% $1400 purchase (TV) $50 a month payment ends up being $626 in interest with a total cost of $2026 and takes 41 months to pay it off.

princessjv
07-10-2006, 03:39 PM
Not only does Target make alot of money from consumers, but also from their vendors. They charge fees for everything....a few hundred dollars for a shipment not arriving on time. A couple of hundred for an item being out of stock...and on and on. It's amazing how many fines they charge their vendors, which usually adds up to a million or so in a year. This is only from one vendor.......

Not to bust this thread, but I had to respond to this one... :) I personally know this statment is untrue. If you choose to do business with Target or any other retailer, you (the vendor) will be held accountable to provide products as agreed upon when you become a vendor.

The practice of being fined for late shipments or out of stock items on a vendors end, is NOT uncommon! Many major retailers do it. In fact, Target was behind the times until recently and didn't charge for these things. A few years back Target had a major change management team come through and found that they were taking the 'butt' (figure of speech) from too many of their vendors and absorbing the costs of such things as late/early shipments and out of stocks. Yes, these things cost a retailer $$$. When you the 'guest' go into a retailer to find product x, product x is not there, you in many instances go to another retailer to find that product. With that out walks a sale, out goes you 'the guest' and perhaps, you may not come back as often, since you may feel that retailer never has what you want.

Target is NOT in the business of attemping to make $$ from vendors to suppliment their bottem line. Vendors who do not ship correctly hurt them. It is Targets strategy to reduce fees with their vendors by helping solve the root cause of the shipment problems.

Back to the OP Topic:
Yes, Target is in the finace business. They do make great profits with it. If you don't like it stop using your credit cards without paying off balances. But remember, you are being solicitated at almost every retailer now days, THEY ARE ALL TRYING to get your CC bsuiness.

disneysteve
07-10-2006, 04:05 PM
Yes, Target is in the finace business. They do make great profits with it. If you don't like it stop using your credit cards without paying off balances. But remember, you are being solicitated at almost every retailer now days, THEY ARE ALL TRYING to get your CC bsuiness.
I just wanted to make it clear that I didn't start this thread to attack Target. I have no doubt that every other major retailer does the exact same thing. I was just surprised by the immensity of the issue.

imsayin
07-10-2006, 04:36 PM
I sat down with DD last year. We do little "Financial Academy" sessions. She really gets a kick out of them. I made up a hypothetical shopping trip and discussed options for payment: cash, check, debit card and credit card

disneysteve Do you ever think you picked the wrong profession? You're obviously very passionate about finances.

SlightlyGoofy
07-10-2006, 04:41 PM
I have long felt that some businesses in this country are no better than the old 'company store' whereby the company paid you in their dollars that were only good at their store. They charged high prices for shoddy goods and kept their employees in debt so badly that they could not afford to work (shop) elsewhere or demand anything better.

Many of the businesses listed give 'easy' credit to people who really are not qualified or able to repay the balances, often buying things that they really cannot afford nor need.

I am glad that I do not pay interest on anything as I do not want to subsidize such.

I teach classes at local schools on how to budget and shop in an effort to make some young people think about how they spend their money. :teacher:

I truly am not wanting to bash anyone. I am worried about the poor people who are being lured in by such practices. :grouphug:

Slightly Goofy

KingTryton
07-10-2006, 04:45 PM
Thanks! I work at a theatre and our manager has gone ballistic -- if you don't upsell the drinks, you will be suspended for one MONTH. I think it's a little ridiculous...so I'm sure there could likely be penalites for not offering the credit card.

My mom got their credit card and what I didn't realize is that it's not just a store card. It actually came in handy -- my parents were at a wedding and their card wouldn't work at the hotel! Well my mom happened to have her Target card with her and it came in handy.

I think the store cards are good if you pay them off. I just got an American Eagle card and since I got it the week after my birthday I got 20% off, plus I used their All Access Pass thing to earn points. On a side note, I'm really impressed with their clothes -- good quality, trendy, and way better prices that some of the other stores.


Seems like an unfair labor practice, being suspended for not upselling a drink. If that really happens go to the local Dept. of Labor and file for unemployment. It is your right to do so and will cause the employer an increase to their premium rating. Also the DOL would have the employer pay you backwages if you were allowed to return to work.
Some managers really do not know their Labor Laws that well.
Good Luck!

summerrluvv
07-10-2006, 05:13 PM
Seems like an unfair labor practice, being suspended for not upselling a drink. If that really happens go to the local Dept. of Labor and file for unemployment. It is your right to do so and will cause the employer an increase to their premium rating. Also the DOL would have the employer pay you backwages if you were allowed to return to work.
Some managers really do not know their Labor Laws that well.
Good Luck!

If that's part of the job description and the employee wasn't doing it that is cause for firing. NY (as well as many others) is a work at will state and you can be fired for any reason here.

disneysteve
07-10-2006, 05:13 PM
disneysteve Do you ever think you picked the wrong profession? You're obviously very passionate about finances.
If I wasn't a doctor, I'd probably be a financial planner. I come by it naturally, though. My father, my uncle and both of his sons are accountants and have had a family accounting firm since the 40's. I was the only one who didn't go into the finance world.

disneysteve
07-10-2006, 05:19 PM
Many of the businesses listed give 'easy' credit to people who really are not qualified or able to repay the balances, often buying things that they really cannot afford nor need.
I've said before I have mixed feelings about this and find it very hard to place blame.

Companies shouldn't grant credit to people who don't have the means to repay it, like giving CCs to college kids with no job and no income for example. But on the flip side, people shouldn't buy things they can't afford, no matter how much credit merchants are willing to grant you. Personal responsibility has to be the bottom line.

Brooknwdw
07-10-2006, 05:32 PM
Oh boy, do I ever get tired of hearing that line.."Would you like to save 10% today by opening an account with us?".... :sad2:

I always say no, but I know someone who opens an account just to get the % off, especially if she's buying a boatload of stuff.

I sometimes am envious of the % off & little "rewards" cardholders get, but I won't take the bait ~~~~ :goodvibes

summerrluvv
07-10-2006, 05:39 PM
I just came back from Target and she asked me if I wanted to open a Target account, it made me think of ya'll :rotfl2:

disneysteve
07-10-2006, 05:52 PM
I know someone who opens an account just to get the % off, especially if she's buying a boatload of stuff.
This really isn't a bad idea at all as long as you have the money to pay the bill in full when it comes. If you are making a substantial purchase, maybe several hundred dollars, why not get 10% off. Pay off the bill and then close the card. It costs you nothing and saves you $30 or $40 or whatever. Personally, it just isn't worth the trouble to me, but if the purchase was large enough or the discount was large enough, I'd certainly consider it.

disneysteve
07-10-2006, 08:35 PM
Here is the link to the original Business Week article.

http://www.businessweek.com/magazine/content/06_29/b3993049.htm?campaign_id=search

It is interesting to read the article. Apparently, Target's credit practices aren't quite the same as other retailers and there is some expectation that it might be heading for trouble as a result.

The little story they tell of customer Cathi Austin is really disturbing. Target gave her a big credit line despite her being maxed out, and kept increasing it once she hit the limit. Of course, she's guilty too. What was she doing out buying patio furniture when she owed Citibank 12K. And then still managed to run up another 10K on her Target charge.

deide71
07-10-2006, 09:19 PM
If you pay the bill in full why does it matter what the rate is? They give me points for each dollar spent toward percent off coupons and contribute something like 2% of my purchases to my son's school, so I really like my Target Card. I spend so much money there that it only made sense to get their CC.


Yep, That's why I use it too!

Brooknwdw
07-10-2006, 09:41 PM
This really isn't a bad idea at all as long as you have the money to pay the bill in full when it comes. If you are making a substantial purchase, maybe several hundred dollars, why not get 10% off. Pay off the bill and then close the card. It costs you nothing and saves you $30 or $40 or whatever. Personally, it just isn't worth the trouble to me, but if the purchase was large enough or the discount was large enough, I'd certainly consider it.


Yes, that's it...not worth the trouble for me. I don't normally buy that much of anything at one time anyway. Plus, doesn't it effect your credit score to constantly be adding Dept. store cards just for discounts?

dvcgirl
07-10-2006, 09:42 PM
Here is the link to the original Business Week article.

http://www.businessweek.com/magazine/content/06_29/b3993049.htm?campaign_id=search

It is interesting to read the article. Apparently, Target's credit practices aren't quite the same as other retailers and there is some expectation that it might be heading for trouble as a result.

The little story they tell of customer Cathi Austin is really disturbing. Target gave her a big credit line despite her being maxed out, and kept increasing it once she hit the limit. Of course, she's guilty too. What was she doing out buying patio furniture when she owed Citibank 17K. And then still managed to run up another 10K on her Target charge.

Yes, definitely blame on both sides here. Ultimitely though, we are all adults and responsible for our own financial fitness. What on earth was Cathi Austin even doing *shopping*? Making 17K a year with 12K in CC debt means that you buy food and a few other items required to sustain life.

With the free reign that these corporations have with raising credit limits and interest rates we all really need to police ourselves. Nobody else is going to do it for you. Unfortunately, at this point, without a huge overhaul in banking legislation, I see no end in sight to the carnage.

summerrluvv
07-10-2006, 09:45 PM
Target isn't the only "relaxed" lender out there. Orchard Bank, Merrick Bank (Hooters Mastercard Product), Walmart, Sam's Club, Dillards, Capital One, Macy's, Bloomingdales, Old Navy, Gap, Juniper Bank, etc. just to name a few are all relaxed lenders as well. The only difference between those lenders and Target is that Target requires 10% of the balance as a min. payment, the other lenders require 3%, so perhaps that's why there is a larger default rate on the Target cards, who knows.

mt2
07-10-2006, 10:54 PM
Thanks arminnie and disneysteve. Trying to teach the girls about money management is challenging. These sites will help.

Also having IL's and a brother that lives on CC helps. We try very hard to be cash only.

SlightlyGoofy
07-11-2006, 06:12 AM
Would you offer a drug addict drugs? I am a firm believer in personal responsiblity also and having made my own, pretty small, mistakes when I was young I learned my lessons.

What happens is that these businesses give credit to people who are obviously not going to be able to repay since they are in the volume business and they collect from enough at such a high rate of interest (and also IMHO because they often sell inferior goods at high prices since the people are unable to get credit many other places) that they are raking in the big bucks.

I personally know people who file bankruptcy every seven years and feel no guilt at all about it. It is mind boggling. I would die of embarrassment.

I believe that this house of (credit) cards will come tumbling down one day. Having how long it would take to pay off current debt listed on the bills would be an eye opener to some people.

BTW, I believe opening and then closing credit accounts hurts your credit score and then it would cost you more money as far as your interest rate goes if you want to borrow to buy a car or a house (about the only debt I agree with and I do not even have that anymore).

Whatever happend to the usuary (sp) laws? Those payday loan places are scary also. If they were not allowed to make such huge returns I doubt that they would offer credit to just about anyone and that would improve things a lot.



Slightly Goofy

Jon99
07-11-2006, 06:47 AM
Correct me if I am wrong (and not to nitpick), the earnings report shows 75% of INCREASED revenue came from credit card operations, from $165M to $196M..

Overall, credit card operations accounted for 35% of net revenue of $554M..

disneysteve
07-11-2006, 07:02 AM
Correct me if I am wrong (and not to nitpick), the earnings report shows 75% of INCREASED revenue came from credit card operations
The link in my OP said this:
"Businessweek just reported that Target’s latest statement shows that three-quarters of their profits didn’t come from the sale of goods—they came from subprime lending."


The link in the actual article says this:
"three-quarters of the company's 15% earnings gain came from its credit-card operations"

You are correct that those are two different statements. The first one implies that 3/4 of all profits were from lending. But the second says 3/4 of the increased revenue.

It looks like the original link (by Elizabeth Warren who is a pretty good source of financial info) is incorrect.

Jon99
07-11-2006, 07:12 AM
That said, 35%(and increasing) is still scary...

disneysteve
07-11-2006, 07:19 AM
Would you offer a drug addict drugs? I am a firm believer in personal responsiblity also

What happens is that these businesses give credit to people who are obviously not going to be able to repay
I agree. What lending criteria can Target, and other lenders, possibly justify to give a woman who earns 17K and already owes another CC 12K (that we know of) a new credit line of 7, then 10 then 12K? That puts her total credit at least 7K more than her poverty-level income. Obviously, Target knew that this woman couldn't possibly pay her bill. Even the combined minimum payments would roughly exceed her annual income if I'm calculating correctly (assuming 2% with Citi and 10% with Target).

So yes, personal responsibility is the ultimate bottom line, but if you give a desperate person enough rope and they hang themselves, I think you share the blame.

Jon99
07-11-2006, 07:30 AM
I just looked at my Sears card, 31% compared to my Citibank and Chase cards that are still under 10%, explains a little as to why they don't have to be selective..

nbodyhome
07-11-2006, 07:37 AM
The little story they tell of customer Cathi Austin is really disturbing. Target gave her a big credit line despite her being maxed out, and kept increasing it once she hit the limit. Of course, she's guilty too. What was she doing out buying patio furniture when she owed Citibank 12K. And then still managed to run up another 10K on her Target charge.

I'd looked up the article online yesterday and was shocked more at the woman than at Target. I mean, I love my Super Target, but what can you buy for $10,000??? I guess I just don't go into the right parts of the store.

Lorikr65
07-11-2006, 07:49 AM
I do the same thing as alot of people here - get the cards for the perks and pay them off each month. Of course I check the due dates and usually pay them off in the store. The one major credit card I have I will pay over the phone from my checking - it gets posted the next day. Sometimes I'll do 2 or 3 payments in a month if I have any extra money (ha, ha!!) - won't have much of that since I back as a SAHM! I only carry a small balance on my major card because it's 0%.

I know some people don't believe in credit cards at all, but I believe in 1 major - in case of emergency (major car repair, etc). I feel comfortable as long as my savings is more than my card - which has been the case so far. I've always said "to each his own" - if someone is having a hard time maybe they have to charge things. There just are so many offers for 0% financing (mailings, sunday coupon section), I would never get any other card. You just have to read the fine print (fees for transfer, etc).

My husband is a police officer and does details at the local, well, they don't like to call it a casino because they only have slot machines, but I call it a casino!! Now that is a scary place!! He sees the same people, waiting for the doors to open, playing 2 machines at the same time, taking cash advances from their credit cards. Some people are so bad they'd rather soil themselves than leave the machines - and they do!!

summerrluvv
07-11-2006, 08:23 AM
I'd looked up the article online yesterday and was shocked more at the woman than at Target. I mean, I love my Super Target, but what can you buy for $10,000??? I guess I just don't go into the right parts of the store.

That woman probably had the Target Visa..which means it can be used anywhere, not just at Target.

dvcgirl
07-11-2006, 10:52 AM
See, I LIKE it when they pitch these cards. I can say "no thanks." But every idiot who gets the card and gets stuck with huge interest and late fees is keeping Target profitable, and letting them sell stuff cheaper to people like me.

Target has a profit margin goal. If they don't make it off credit cards, they'll make it somewhere else. That is the way businesses work. I'd rather they make their profit off someone other than me.

I feel the same way about extended warrenties. Go ahead and pitch away. Its just making the product cheaper for me.

I hate to say it, but this whole reality is why only about 1/4 of our generation...the Gen Xers, and even the Baby Boomers will retire well. We're the ones who are avoiding debt and saving/investing like crazy. We always see all of these median numbers for 401K balances, but the reality is that there is a small percentage of people who have very high balances who are pulling that number up....way up. 1/4 of the nation hasn't saved a penny. But that other 1/2 is living right at, or slightly above their means and keeping consumer spending chugging along. And they have very small 401K balances relative to where they should be to retire at 65.

I read an article recently that was sort of twisted, but probably true. This author's premise was that those of us who have saved bigtime should be hoping that the 50% of us spending like crazy *don't* wake up. Because if they do wake up, stop spending and start saving, well, consumer spending will plummet and companies will start to flounder and their stock prices will go right down with it. And down goes our return with it. He actually predicts that this will happen to a certain degree. He believes that some of us Gen Xers will see our Baby Boomer parents really struggle in retirement (he uses the dreaded "eating cat food" scenario) and start saving like crazy. And that in turn will make it even tougher on us Gen Xers when retirement comes.

In other words, how will us savers live really well if we *all* become savers....that's his general premise.

Personally, I'd like to see my fellow countrymen wake up and smell the coffee, but I'm really beginning to wonder if that is going to happen. The generation behind us is going to struggle even more with debt by all accounts. They've had the "debtor's mentality" ingrained them since signing up for their first credit card at 18 in the student union building.

I read a whole lot on personal finance and more and more I see articles about "The New Retirement", or "Not Your Father's Retirement....but It can still be Great!!" Every time I read one I feel like the audience is being set up. *Every* study on the topic shows that a whole lot of Americans are unprepared, but Americans would rather bury their heads in the sand and just not deal with it. You can't sell magazines that way. And so instead of the doom and gloom stories about how pitiful our 401K balances are, these "upbeat" stories tout the glory of a part-time job at age 70. You know the story, "Joe Average, 68, was a software engineer his entire life, but now he works at Epcot Center in Orlando Florida for extra spending money". They'll quote Joe..."I enjoy the interaction with the people and the part time benefits help cover the gap in my health coverage."

I always wonder if Joe Average is *really* so happy about his $7 an hour job at Epcot, or if he's just doing what he has to do. I just finished a book called "Green with Envy, Why keeping up with the Joneses is Keeping us in Debt", and it in the author makes an interesting point...

"Since many boomers have managed to keep their expectations high while not preparing to support themselves in retirement, the solution, mixed with denial or panic, is to keep working and keep earning, and to to hope that the opportunities don't run out. Some of the boomer rhetoric is that the generation is unstoppably energetic, that they wouldn't *want* a golden-years-style retirement on the golf course. That could partly be true, but more likely we're seeing a psychological phenomenon of retrofitting: Faced with a reality, we not only adjust to it, but start seeing it as what we wanted all along. It's a coping mechanism that is well suited to boomers over age 50."

This is what I see happening....

nbodyhome
07-11-2006, 11:40 AM
I always wonder if Joe Average is *really* so happy about his $7 an hour job at Epcot, or if he's just doing what he has to do. I just finished a book called "Green with Envy, Why keeping up with the Joneses is Keeping us in Debt", and it in the author makes an interesting point...



Many of those who are working at Disney for $7 an hour are either college program, just starting out in their careers, are retirees, or are doing a second job at Disney because the enjoy it - or often, it's a second income in the household. There are certainly people who stay at $7 an hour, but I don't think that most do.

As my Uncle Bill used to say "it's not what you make, it's what you keep". I've known people who made very little, but saved a lot. I've also known people who make great incomes and blow it all. Of course, there are some - like the woman in the Target article - who have as much consumer debt (not including cars or mortgage) as they do a yearly income. And I know that from past experience, once you have a lot of credit card debt, it really snowballs with interest charges.

I didn't realize that the Target card was also a Visa - I don't even pay attention, I have never had an interest in one. Being asked about it all the time tends to turn me off. I have more than enough credit cards (4?) with 2 of them having no credit being used on them.

MrsPete
07-11-2006, 11:49 AM
Not only does Target make alot of money from consumers, but also from their vendors. They charge fees for everything....a few hundred dollars for a shipment not arriving on time. A couple of hundred for an item being out of stock...and on and on. It's amazing how many fines they charge their vendors, which usually adds up to a million or so in a year. This is only from one vendor.......I read a very interesting article about grocery store "fees" a couple years ago. A manufactuerer -- Coke, for example -- pays a fee to be allowed to place its product in the Food Lion store. For a small fee they can have their product placed up high or down low. For a larger fee they can place their items at eye level, or they can have a whole "top to bottom section" or even an end cap.

The store brands don't have to pay these fees, so that's one reason we can buy Food Lion sugar for so much less than Dixie Crystals sugar.

That's also why the little guy has such a slim chance of introducing a new product -- he can't afford to compete with the big boys and their deep pockets, so his product isn't noticed.

disneysteve
07-11-2006, 11:51 AM
Many of those who are working at Disney for $7 an hour are either college program, just starting out in their careers, are retirees, or are doing a second job at Disney because the enjoy it
I think dvcgirl's question was of those retirees, how many are there because they want to be and how many are there because they have to be.

I have many elderly patients, and by elderly I mean 70s and 80s, who are still working full-time because they have no other choice. One woman is a waitress at a diner and still works night shifts, 11pm to 7am. Does she want to be doing that? Absolutely not. But she's stuck financially. Another guy does maintenance work for an apartment complex. The work is physically demanding and hard for him to keep up with, but he needs the money.

What everyone is wondering is how many of the boomers and X'ers are going to wind up in the same situation because of poor money management in their working years.

MrsPete
07-11-2006, 11:55 AM
I sat down with DD last year. We do little "Financial Academy" sessions. She really gets a kick out of them. I made up a hypothetical shopping trip and discussed options for payment: cash, check, debit card and credit card. We went over the pros and cons of each. And I particularly focused on the CC. I used an online calculator to show her the effect of not paying the full balance in full and how much interest she would pay and how long it would take to repay the balance if you just pay the minimum each month. It was quite eye-opening for her. I even heard her telling my mom about it a couple weeks later.We have never given it a name, but we do the same thing. In a few weeks, for example, when it's time for back-to-school supplies, I'll give each girl a "bonus" along with her allowance. Each girl will be expected to buy her own back-to-school stuff with that "bonus". And though paying cash is their only option right now, we'll discuss the other options that they'll have as they grow older.

I think I've scared my oldest daughter though. She already says she's never going to have a credit card -- she says she doesn't think she has the self-control.

MrsPete
07-11-2006, 12:02 PM
If I wasn't a doctor, I'd probably be a financial planner. I come by it naturally, though. My father, my uncle and both of his sons are accountants and have had a family accounting firm since the 40's. I was the only one who didn't go into the finance world.Given that we share a similar approach to saving, it's interesting that we both had accountant fathers. My father was a CPA, and he worked an an Internal Auditor most of his career.

However, in his case, all that knowledge didn't translate into good personal financial habits. (Do as I say, not as I do.) His free-spending habits were among the biggest reasons for my parents' divorce.

disneysteve
07-11-2006, 12:11 PM
However, in his case, all that knowledge didn't translate into good personal financial habits. (Do as I say, not as I do.) His free-spending habits were among the biggest reasons for my parents' divorce.
Sad that all that finance knowledge didn't change his own habits. Of course, I know plenty of doctors who overeat high fat diets, a few who smoke (very few actually) and drink in excess. I happen to believe in practicing what I preach.

MrsPete
07-11-2006, 12:13 PM
Seems like an unfair labor practice, being suspended for not upselling a drink. If that really happens go to the local Dept. of Labor and file for unemployment. It is your right to do so and will cause the employer an increase to their premium rating. Also the DOL would have the employer pay you backwages if you were allowed to return to work.
Some managers really do not know their Labor Laws that well.
Good Luck!But most people who sell fountain sodas 1) also don't know the Labor Laws, 2) know that it's easier to find a similar job than to file an official complaint, 3) know that even if they were successful in filing a complaint and getting the backpay, they'd be miserable returning to that job: they'd be working every crap shift, they'd be assigned to the worst jobs, etc. Sometimes the employee is in the right, but proving it isn't worth the effort.

MrsPete
07-11-2006, 12:27 PM
I'd looked up the article online yesterday and was shocked more at the woman than at Target. I mean, I love my Super Target, but what can you buy for $10,000??? I guess I just don't go into the right parts of the store.Oh, I don't think it'd be all that hard -- for a person who doesn't really keep up with her finances, or a person who doesn't really grasp the idea of how interest adds up. I know people who literally go to Target 2-3 times a week, and they usually spend the better part of $100 every time. Just spend $100 every other week, and you'd run that card up in only two years! And that wouldn't count "big shopping trips" at Christmas and back-to-school time.

These same folks "make" hundreds from their annual yard sale.

MrsPete
07-11-2006, 12:32 PM
Some of the boomer rhetoric is that the generation is unstoppably energetic, that they wouldn't *want* a golden-years-style retirement on the golf course. That could partly be true, but more likely we're seeing a psychological phenomenon of retrofitting: Faced with a reality, we not only adjust to it, but start seeing it as what we wanted all along. It's a coping mechanism that is well suited to boomers over age 50."Interesting thought.

disneysteve
07-11-2006, 12:33 PM
Oh, I don't think it'd be all that hard -- for a person who doesn't really keep up with her finances, or a person who doesn't really grasp the idea of how interest adds up. I know people who literally go to Target 2-3 times a week, and they usually spend the better part of $100 every time -- spend $100 every other week, and you'd run that card up in only two years! And that wouldn't count "big shopping trips" at Christmas and back-to-school time.
It also wouldn't count interest fees, late fees and over limit charges which I'm sure are part of that balance.

Laurajean1014
07-11-2006, 01:17 PM
Most anything is good as long as it is used in moderation.

imsayin
07-11-2006, 01:21 PM
These same folks "make" hundreds from their annual yard sale.

::yes::

katerkat
07-11-2006, 03:01 PM
I think dvcgirl's question was of those retirees, how many are there because they want to be and how many are there because they have to be.

At Disney, I would say the majority of the "young at heart" are there because they want to be. It's pretty easy to find a retail job at a MUCH better location than Disney - it just happens that they like the Disney atmosphere. (Same with the WDWCP - we all could have gotten better jobs, but the majority of people there really wanted to be at *Disney*.) Now, other retail jobs, it's different. I was the only one at my retail store working for "fun" - everyone else was doing it to pay bills.

arminnie
07-11-2006, 04:05 PM
Of course, I know plenty of doctors who overeat high fat diets, a few who smoke (very few actually) and drink in excess.

In the "olden" days most doctors smoked - I remember having some respiratory problems, and the doctor came in the examining room with a cigarette in his hand!!! http://smileys.smileycentral.com/cat/23/23_17_3.gif (*******************************************ZSzeb0 01_ZNxdm395YYUS)

arminnie
07-11-2006, 04:16 PM
I'm one of the older baby boomers - we are the first ones to turn 60 this year.

All in all I'd say my immediate peers (age group) are doing okay. I went to a very diverse high school and keep up with many of my ex-classmates. Some have done quite well and others are sort of starting over (like a SAHM who is divorced and in school to start a nursing career).

But all in all I think most of the 60ish people that I know are at least not in huge credit card debt. I know some of you have parents and grandparents who are the exception to this, but most of my generation grew up with a dim view of credit. It wasn't around and wasn't very available.

I worked for the Credit Bureau while in high school and college and had access to everyone's credit history in the state. There really was a stigma to being in debt.

I still remember hearing people say you should never finance a car for more than 2 years. If you needed to finance for longer than that you couldn't afford it. That has gone by the way side, but for many of my age peers there's still that little voice saying "No - don't do that."

I liked what nbodyhome's Uncle Bill said

"it's not what you make, it's what you keep".

deide71
07-11-2006, 09:46 PM
This has turned into a very interesting thread.

It reminds me of my college days in the early 90's...I was taking a Political Science class and the professor was lecturing on the topic of "intergenerational justice". This was essentially a fancy term to describe how each generation has seen the next do better than they had. His premise was that we (the Gen X-er's) would not do as well as our parents (the Baby-boomers) due to multiple economic factors. This would soon lead to great political upheval and possibly a more socialist society.

If you remember the very early 90's there was a recession at the time. There was much doom and gloom about what our futures held.

Guess what happened in the mid to late 90's? Yes, one of the fastest times of economic growth in our history. Contrary to what my professor said myself, and many of my Gen-X co-horts are doing just fine, even better than our parents.

I'm not saying these economic issues are nothing to worry about, but do what you feel is right in regards to spending and saving. Let the others worry about their financial problems.

MyGoofy26
07-11-2006, 10:17 PM
On the topic of retirees at Disney, we had a number of them in my area and all made over $10 an hour (except the couple that worked every summer a whenever their camper found it's way back to Orlando so they could "work" their way around the country and treat the grandkids to Disney) They also knew how to take advantage of Disney's generous OT policy. I remember asking one guy why he volunteered to work Christmas day - he said because he was essentially making about $40 an hour to be there. He got his "bonus" where fulltimers were paid their wage for a full day, and since he worked he got doubletime on top of that. He LOVED his job there too, you could really tell. I don't know if he *had* to work, but he didn't act like it.

dawnball
07-12-2006, 01:33 AM
I read an article recently that was sort of twisted, but probably true. This author's premise was that those of us who have saved bigtime should be hoping that the 50% of us spending like crazy *don't* wake up. Because if they do wake up, stop spending and start saving, well, consumer spending will plummet and companies will start to flounder and their stock prices will go right down with it. And down goes our return with it.

That's pretty much conventional economic wisdom. If everyone did what was actually financially best for themselves, the economy would grind to a halt. That doesn't mean that I'm inclined to do things that are financially bad for me - although I probably do unwittingly or because there are no really good choices available.

dvcgirl
07-12-2006, 06:58 AM
This has turned into a very interesting thread.

It reminds me of my college days in the early 90's...I was taking a Political Science class and the professor was lecturing on the topic of "intergenerational justice". This was essentially a fancy term to describe how each generation has seen the next do better than they had. His premise was that we (the Gen X-er's) would not do as well as our parents (the Baby-boomers) due to multiple economic factors. This would soon lead to great political upheval and possibly a more socialist society.

If you remember the very early 90's there was a recession at the time. There was much doom and gloom about what our futures held.

Guess what happened in the mid to late 90's? Yes, one of the fastest times of economic growth in our history. Contrary to what my professor said myself, and many of my Gen-X co-horts are doing just fine, even better than our parents.

I'm not saying these economic issues are nothing to worry about, but do what you feel is right in regards to spending and saving. Let the others worry about their financial problems.


You are right...it was all doom and gloom back in the late 80s and early 90s with the stock marketing plummeting in 87 followed by real estate dropping like a rock right after it. Sometimes I try and remind myself of that because *all* that I read these days on the topic of our part in the global economy and our collective future is doom and gloom.

I guess the only problem is that too many of "the others" aren't worrying about their own financial problems. They've got their heads buried in the sand, or they just keep telling themselves that it will all work out. Unfortunately, for many, it won't "just all work out" this time. And while the government has seen these problems coming for years, it has done absolutely nothing about it. Make no mistake, we will *all* pay the price to some degree, whether it is to see our taxes raised to cover the gap in SS and Medicare, or our benefits decreased.

In all honestly, I'm not really worried about me and my DH. We're so far ahead of the curve with respect to our savings and investments....and we should be. We live way beneath our means and when we have come into large sums from the sale of stock or real estate we have invested it. I am worried about a lot of people I know though, because I fear that their "golden years" aren't going to work out exactly the way that they've planned.