bank rates credit cards insurance finance calculators

Tar-shay growls at credit card customers

If you’ve ever shopped at Target (and we know you have), you’ve been urged to open a Target credit card as you made your way through the checkout line.

Target branded credit cards, or REDcards, as they’re called, come in two types: a Target store card, or a Target Visa.

The sales pitch cashiers were required to make emphasized how easy the cards were to obtain and the discount customers received the first time they used the cards.

Now customers say Target’s gone from licking their hand to biting them in the butt.

Interest rates that ranged from 11.24% to 20.24% are being raised to 22.29% or more, across a wide cross-section of users.

Some had store-only cards, some had Target Visas. Some carried a balance. Others did not.

We asked Target for an explanation, and this is what its public relations staff said:

“In response to the current economic climate and the related increased level of risk, Target implemented a terms change, effective in April 2009. The terms change better aligns Target Credit Account terms with the credit card industry while permitting Target to remain competitive relative to its peers.”

Let us translate that for you: Target lost $135 million on its credit card business in just the three months ending Jan. 31, prompting headlines like this in the Wall Street Journal: ” Target Corp. Profit Falls 41% as Credit-Card Losses Mount.”

The discount chain is writing off more and more bad debt and a disgruntled hedge fund manager has launched a proxy fight for five seats on Target’s board of directors.

Looks like Tar-shay pushed its credit cards on too many customers who weren’t all that credit worthy, and now all of its customers will pay for that mistake.

Your options?

If you received a letter from Target you have until April 2 to opt out of the changes. That means your account will be closed and you can’t use the card again, but you can repay any balance under the old terms.

Comments (7)
1 Star2 Stars3 Stars4 Stars5 Stars (6 votes, average: 4.33 out of 5)
7 Existing Comments
  1. BloggingBanks said:
    on March 21st at 01:15 pm

    I have worked at Target a while ago and could definitely tell you that most of the people that received TGTcredit cards were declined due to low credit scores in the first place.. I wonder how many other retailers such as TJ MAXX, Marchals, Kohl’s which also offer credit cards are suffering from bad loans..

  2. Patrick said:
    on March 23rd at 08:04 am

    I have worked at Target and this article is right in the money. TGT forced many of its works to push the Redcard and if they got “Guests” to apply or pre-approved push it hard and a reward if they got ththe Guest to sign up. As the article states many were really not worthy and this is what TGT and many of the banks are finding out now. When you push to much it will turn on you.

  3. Ken said:
    on March 26th at 01:01 pm

    I made the mistake of getting a Target Visa just so I could save 15% on my daughter’s keyboard. Unfortunately, I used it way too much later and it is almost maxed out. At almost 23% it is the worst credit card I have ever owned and I am very upset at myself for using it so much. I cut it up a week ago and will now focus on paying it off. Store credit cards are the worst! I will avoid them at all costs in the future. I still love Target though!

  4. Andy said:
    on April 6th at 07:48 pm

    My credit rating is in the mid 700’s and Target was charging me 16.99%. After I lost my job we needed to use the card a bit more and began to carry a balance. We were never late on a payment yet Target has twice raised our interest rate in the last year (now to 22.99%) and cut our limit from $11K to $4.5K so that we are now technically maxed out, whereas before we weren’t even at 50%. All of my other cards are around 8-10%…so Target is full of it. We paid it off immediately and Target has lost a customer. Their Customer Service is rude and mean spirited. Their excuse for cutting our limit and raising our rates was that we don’t have a home loan and the percentage of maxed out credit accounts. Funny thing is that we don’t have any maxed out accounts and Target was the only one that was AFTER they cut the credit limit. Sneaky!

  5. Nobody Important said:
    on August 17th at 03:39 pm

    If you’re trying to be cute in how you pronounce TARGET, make it TAR-JAY, not TAR-SHAY. TAR-JAY is a play on how it would be pronounced in French; TAR-SHAY is somebody’s ill-informed effort to sound witty. 😀

  6. albert said:
    on April 11th at 05:13 pm

    Got Redcard with $200 limit in 1998. In 2003 got a Target Visa with credit line of 5500. In 2006, Target raised to 8500. March 2009 c/l decreased to 6500 with no explanation (also raised APR to 23%). in Dec. 2009, lowered again to 5500. Paid balance in March 2010, in April ç/l decreased to 500. Customer service reps shocked and confused as me. Finally closed account without regard to credit score. Never been late on ANY card and never maxed out. I will NEVER step foot in a Target store again.