Very interesting article on Target stores UPDATE p.5

[sk!mom]

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.

 

[jeankeri]

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" . I gave him a simplified explanation of who was really paying for all the incentives.

 

[MyGoofy26]

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]

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]

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]

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]

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]

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]

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]

My DS9 once said, "Wow, they give you great things for using their cards" . I gave him a simplified explanation of who was really paying for all the incentives.

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]

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]

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]

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.

 

[MyGoofy26]

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.

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]

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]

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]

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]

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]

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]

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.