I've thought about posting this story for months because of how hard it is to get a CLI from Target. Though as a result of my months long communications with Target management I learned a bit about how their system works. Whether or not to share this info has weighed in me.
I first got my RedCard in 2013 and was granted a $200 credit line. About four months later they auto cli my account to $400. Then again to $600 about five months after the first bump. Though my cl sat there for about 2 years.
When I discovered credit karma I began to notice just how bad this low cl was impacting me. I shop a lot at Target, so much so that when I call customer service I get moved to the front of the line. My low cl forced me to pif multiple times in a month to keep below my cl. Target was reporting my balance mid cycle which killed my utilization on this card. Typically I'm less than 10% util on all my cards. As a result, if I hadn't paid my balance before the 18th my credit score would tank about 30 points until the next reporting cycle.
I called customer service numerous times because I was sick and tired of having to pif several times in a month. And especially having to keep an eye on the date to make sure a payment would post before the report date. Every time they told me the same thing, only auto cli and to update my income.
I finally got to the point I was considering closing the trade line. As a professional I couldn't wrap my head around why this was such a pain. I thought, if you want to change something systemic like this you have to go to the top.
I drafted and sent an email to CEO Cornell and plead my case. I described the frustration of having to make multiple payments, the effect of the low CL on my credit, and my questioning of the long term financial benefit of the card. Sure 5% is great, but if the use tanks my score before applying for a loan it could cause me to get a higher interest rate. I pointed out that Target markets the card as a decision that makes good financial sense. However their policies are causing financial harm.
I closed my letter describing why I prefer Target, my thanks for his time, and requested that he intercede on my behalf or forward my email to someone who could help. I never expected to get a response from him, but I was hoping he'd forward my email. I know the effect an email from the CEO has on employees.
Two days later I got a call from the RedCard project manager. I returned her call and we spoke pleasantly for a bit. She said she'd checked on my account and noted I'd recently updated my income. She said things looked good and to see what happens on my next cycle cut.
A month later I called her again and left a VM. My cycle had cut the week previous and there was no increase. She called back and advised she'd look into it with the risk department. It took some time but she did reply and advised that the reason the system didn't increase me was because I paid off the card before the cycle date.
I was then told to wait another month and carry a balance. This was hard to pull off, which may seem strange, but I buy a lot with Target and make payments to keep my purchasing power. I didn't want my score to tank to I let about $90 carry. A week later there was still no increase so I called the PM again.
We chatted a bit when she called me back before getting to business. She let me know that the analysts said the reason the system didn't increase me is because I didn't carry enough of a balance. I reiterated the effect carrying a high balance has on my credit score. She stated that they look every month and if I decide to carry a larger balance I might get an auto cli. I sensed she was giving up, but I'd come too far. Having looked at the credit pulls database I noted that new customers with far lower credit scores were getting initial cls multiples higher than mine. I decided I'd bite the bullet and carry a higher balance, I wanted to force a discussion among Target's management.
A month later I carried a 550 balance. My credit score tanked 40 points with EX and TU as reported by credit karma. Still no increase. I called the RedCard PM again and left a VM asking if she could check on my account and get back to me. A week went by and I got no response so I called again, another voice mail.
After a couple days of no response I sent Cornell another email. I detailed all the hoops I'd jumped through, the months of waiting, the drop in my credit score, and the irony of the pains a loyal customer like me has to go through. I shared some personal stories and asked again if there was anything he could do.
A few days later I got a call from a now frustrated PM. She left a VM advising she was traveling but had been authorized to give me a small $300 increase to $900. My heart dropped when I listened to that VM.
When I first got the RedCard I made less than 50k. In the years since my income has almost trippled. As a result my spending has increased incredibly. While my efforts for a cli succeeded it was a hollow victory. The increase I got was paltry and nothing in Target has changed.
It's been 6 months since my increase and I'm still having to pif multiple times a month. Was it worth it?
With luck my story will help others with understanding Target's crazy credit ways.
EDIT:
I've closed out my RedCard. It was once one of my favorite credit cards but over time became nothing but a hassle and an irritant. Reviewing comments here, on other boards, credit pulls database, and in store observation has led me to believe Target is a predatory lender. Target is reknown for their statistical abilities even accurately predicting pregnancy.
Their credit extension system seems to favor those most statistically likely to carry a balance. Given the RedCard has a 23+ APR that is potentially quite lucrative. Of course, those with the capability and statistical probability to PIF are only a loss (the discount and account maintenance costs) so why encourage their spending with higher CL's? It's cheaper to encourage them to use cards with transaction fees less than the discount. The World Elite Mastercard transaction fee is less than 3% and American Express is less than 4% (I'm sure at Target's volume they get a sweet deal on transaction fees). It's disgusting really when you think about it and has colored my view of Target.
Best of luck to all the RedCard holders out there.
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