The Target Credit Card.

Target (Photo credit: kevin dooley)

I like Target. I prefer it over Walmart. I don’t do a lot of shopping, but if I am shopping, Target is one of my main stops…which brings us to the Target Credit Card. The card comes with a grace period on payments (if you pay in full, then you aren’t charged interest) and no annual fee (take that American Express). In addition it offers a 5% discount on every purchase made at Target using the card. You read that right – not a measly 1 or 2% on some purchases – but across the board, 5%!

Is that all? Well not quite. Don’t forget that when you use the Target credit card online you’ll get free shipping and handling on your purchase and extra time (+30 days beyond the usual) to return your items. Yeah, it is a little like Amazon Prime without the subscription fee.

Now, there is one drawback to this whole Target credit card thing – and that is that you’ll be tempted to spend more time at Target. But for those who can resist the urge to splurge, the Target credit card makes a lot of sense and can be a real money saver.

I think Target is onto something great and hope that they will continue to improve their services. They are a brick-and-mortar store that is evolving with the times – but will they go far enough and fast enough? I hope so…

Just in case anyone from Target is pondering how they might go farther and faster, here are a few friendly suggestions:

  • Integrate Receipts – This would be huge. Make that line item for a $102.50 purchase at Target clickable and when I click on it show me the individual items I purchased. In this way I can keep better track of what purchases are household, pharmacy, clothing, automotive, entertainment, grocery, and so on…
    • Along with this could be an option to get rid of paper receipts. If I use a Target card let me set an option that determines if a paper receipt is printed or not on the site (or at a cashier). Not only is this good for the environment but it saves me the annoyance of carrying around that annoying piece of lengthy paper.

Ummm…I guess that is only two recommendations, the card is nearly that perfect. What is your favorite credit card? Are there other features that Target’s card is missing?

Time for Dave to “Eat Crow:” Quizzle is worth your time…

I don’t like admitting more than anyone that I was wrong – but I was, and it is time to own up to it. Basically, take everything I wrote in the post, “Goodbye Quizzle, Thank You CreditKarma” out the window except for my applause for CreditKarma – which remains a great service.

I had decided Quizzle wasn’t worth the work because they only allowed one to pull a credit score once every six months whereas CreditKarma lets you do it every day if you wish. I was corrected by a representative from Quizzle who informed me that Quizzle offers not just credit scores but credit reports. So while I think it would be great if Quizzle let me update my credit score every day and view my credit report every six months – the point is that Quizzle does have something really valuable to offer: free credit reports.

What is the difference? A credit score is a number that gives you an idea of how good your credit rating is compared to everyone else’s credit score. A credit report tells you what exactly is contained in your credit file. This is a valuable service and one that I don’t think you can get anywhere else for free – except – but that is only once a year.

So color me embarrassed, I re-endorse Quizzle, and am using my account…and you should too.

Fixing the Banking System.

2005 US cent, obverse side
Image via Wikipedia

Today as I was driving home from work[1] I was listening to NPR[2] and heard a story about the congressional battle over capping fees banks charge for purchases. Such a cap would benefit retailers (anyone who accepts debit cards) and would theoretically result in lower prices for the consumer. Apparently, the battle has been pretty thick and furious.

I understand the retailers (and stereotypically liberal) perspective that the fees are unfair and unjustly inflate prices while rewarding banks. I have very little sympathy for our financial institutions which have received tremendous bailouts on the taxpayer’s dime. On the other hand, I understand the banks (and stereotypically conservative) perspective that free market forces should be allowed to reign in this situation…

That said, I’d like to suggest there is a better way to resolve the issues of our banking system – which does not require government intervention and which would result in forcing the industry to readjust. A non-profit bank. Traditionally, companies send their financial returns into the pockets of shareholders or owners/employees, in the case of a non-profit the financial returns are largely expended in accomplishing the company’s stated goals. Thus the shift of focus moves from individual prosperity to the accomplishment of a specific goal (in this case, the facilitation of exchange of goods and services).

The difficulty is who is willing to start such a non-profit? Sure, I could start a non-profit – but I can barely pay my own bills much less facilitate the exchange of finances. It would have to be someone with a significant amount of financial resources – or a group of individuals who worked together.

It might be possible to get such a bank off the ground by starting local and small – and building business over time to cover larger regions – but even then one would need a significant amount of capital…and one can’t expect other banks to play nice if they see such a non-profit bank that threatens the very core of their financial profits expanding.

Perhaps a few of our bigger tech giants would consider undertaking such an endeavor? A Bill Gates or Steve Jobs?

The easiest way to accomplish this on a nationwide or global scale almost instantaneously would be to buy out an existing business involved in the market – the most sensible option being PayPal. With its extensive customer base, existing systems, and so on – it would be a fairly simple process to lower fees and  increase features. Folks would be able to use their traditional banking means simultaneously with PayPal based non-profit banking, but the shift would be significant and instantaneous as one received significantly lower interest rates and fees on purchases and sales. Retailers (such as Amazon) might move to offer discounts to folks who used PayPal to make purchases instead of Amazon – perhaps half of the amount they would be saving from reduced or eliminated transactional fees.

Granted, there will always be interest and fees. I am not suggesting that banking should be free – bankers need their bread and butter as much as we do. Additionally, one must consider the losses which occur due to bad debts – in order to offset these losses it is necessary to charge interest and fees….but they could be cut drastically and the incentive for poor fiscal judgment would be significantly reduced without the pressure of shareholders demanding a return and the promises of personal wealth.

The credit unions appear to be a positive step in this direction – as they function on the concept that the members of the union are the owners of the union. However, I have never been part of a credit union (hmmm…maybe I should look into that…) and I haven’t heard of them having aspirations for this sort of national or global endeavor. Finally, the union, strictly speaking, exists for the benefit of its members and not for the goals or ends of the company – which in my mind can become somewhat confusing. Are my goals as an individual member or as a group of members for myself or for the method of accomplishing financial interactions as a whole? A non-profit would be committed to facilitating the exchange of services and commodities – the credit union, at least in theory, is primarily concerned with providing for its own membership and only tangentially with the facilitation of exchange of services and commodities as a method of serving its membership.

Other positive steps in this direction seem to be accruing through direct lending – such as that offered by Prosper. These services are not non-profit, but do take unnecessary middle-men out of the equation simplifying the process of facilitating lending.

There are also digital currencies like Bitcoin which might offer some promising alternatives – though they need to be significantly simplified to bring about real-world usage. Bitcoin uses the membership to manage (automatically) the financial transactions, eliminating significant amounts of middle managing.

What do you think? Is the banking system broken? How? Can we fix it? How? What downsides would exist from going with a non-profit bank? Why don’t credit unions expand more rapidly? Why has no one formed a non-profit bank yet?

  1. [1]A very short five minute commute.
  2. [2]Does that make me a liberal?