Very interesting article on Target stores UPDATE p.5

Discussion in 'Budget Board' started by disneysteve, Jul 10, 2006.

  1. disneysteve

    disneysteve You have to enjoy life, not go

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    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.
     
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  3. sap1227

    sap1227 DIS Veteran

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

    vegasnative DIS Veteran

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    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.
     
  5. mjbaby

    mjbaby DIS Veteran

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    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.
     
  6. DVCLiz

    DVCLiz <font color=00cc00>That's me - proud defender of t

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    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!!!!
     
  7. tweetylori

    tweetylori Mouseketeer

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    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.
     
  8. disneysteve

    disneysteve You have to enjoy life, not go

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    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.
     
  9. disneysnowflake

    disneysnowflake DIS Veteran

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    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.
     
  10. Alicnwondrln

    Alicnwondrln DIS Veteran

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    wow thats crazy
     
  11. mickeyfan2

    mickeyfan2 DIS Veteran

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    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.
     
  12. Chicago526

    Chicago526 <font color=red>Any dream will do...<br><font colo

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    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%!
     
  13. dvcgirl

    dvcgirl DIS Veteran

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    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.
     
  14. Free4Life11

    Free4Life11 DIS Cast Member<br><font color=red>I just have to

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    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.
     
  15. katerkat

    katerkat I wine a lot...it makes me feel better

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    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.)
     
  16. mjbaby

    mjbaby DIS Veteran

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    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.
     
  17. summerrluvv

    summerrluvv <font color=darkorchid>Work Hard. Have Fun.<br><f

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    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.
     
  18. summerrluvv

    summerrluvv <font color=darkorchid>Work Hard. Have Fun.<br><f

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

    katerkat I wine a lot...it makes me feel better

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

    crisi DIS Veteran

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    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.
     
  21. dodukes

    dodukes DIS Veteran

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    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)
     

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