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.
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.