Can you be rejected for a debit card?
Two Target shoppers were surprised to learn they'd been turned down for a Target REDcard debit card.
This post comes from Geri Detweiler at partner site Credit.com.
When a clerk at Target told Annette Tierney she could save 5% on her purchases by opening a Target REDcard debit card, it was a no-brainer. "Every time we go in there we get a cart full of stuff," she explains. "We usually spend $250 to $500."
It also seemed simple enough: The store's debit card is set up to draw from a customer's existing checking account. She was shocked, though, when her application for the card was declined.
Since she and her husband avoid debt and have "great credit," her first thought was that perhaps they had been victims of identity theft. But when she called the customer service number provided, she was told her application was declined due to a lack of check-writing history with Target. She told the representative that she uses a bank debit card when she shops at Target, but the representative wouldn't budge. She was told she'd have to first establish a check-writing history with Target to be considered for the card.
Tierney's situation raises the question: Can you get turned down for a debit card? On the surface, it would seem that the answer would be "no," or at least not likely, because the card is only used to access the money you already have in your bank account. But, in fact, you can be turned down for a debit card, though the reason is most often due to prior checking account problems. (Post continues below.)
That's what Rosalie Zamora found out when her application to open a Target REDcard debit card was declined. "I received a 'regret' notice indicating that there was some negative reporting from a reporting agency called Certegy," she said in an email to Credit.com. Certegy provides check authorization and guarantee services to merchants and businesses nationwide, and is considered a specialty consumer reporting agency under federal law.
Zamora called Certegy and was told there was no negative information on file for her. She was then referred to another consumer reporting agency, TeleCheck, which found an unpaid debt from ACCS Bad Check Restitution. When she called that company, she found out that her information had been mixed up with that of someone who previously bounced a check:
I was sent three letters of apology stating that a clerk at a store keyed in a driver's license number incorrectly for someone cashing a $50 check a few years ago that bounced. That driver's license (number) ended up being mine and went on my record. They say that they have unlinked my driver's license to that case and I should be good to go now.
Tierney, on the other hand, still doesn't understand why she can't get the card. The debit card application states (.pdf file) that "Target may gather any information considered necessary and appropriate, including consumer reports." However, it makes no specific mention of requiring consumers to have a check-writing history at the store.
"They didn't (admit) it was a ridiculous excuse," she fumed.
She's since sent email complaints to members of Target's executive board. I shared with her that I was surprised by her story because I opened a Target REDcard debit card last year and, to my knowledge, I have never written a check at Target.
Target officials declined to comment for this story.
Tierney speculates that Target would rather have her sign up for its credit card than the debit card. "I feel like they are using this great advertising campaign, but I feel like what they really want is for people to use their credit card. They want to push American consumers deeper and deeper into debt. That's just my theory," she says.
And even though Zamora's check-writing history has been cleared, she didn't appeal the decision with Target. "Forget it," she says. "I'm done with Target. Although it's not their fault, this issue left a bad taste in my mouth."
More on Credit.com and MSN Money:
There is no reason to get a store credit card (which usually has a very high interest rate over bank credit cards) or use anything but your bank debit card (treated the same as a credit card). credit cards are for emergencies or purchases you pay off at the end of the month (which helps establish your credit history for the idiots who ping you because you don't use credit). One credit card is all you need. Don't get suckered into getting more than that and make sure you read the fine print or the stuff in the "box" on the application. Never get anything that charges you an annual fee or has a two-month average daily balance. (Discover is notorious for this one.)
Here's why: I had a discover card back in my salad (i.e., stupid about credit) days. I paid off an $11,000 bill to discover, but forgot that I charged something that month of $40.00. So when I get the bill the next month, instead of getting a bill for $40.00 I got a bill for $240.00 because they looked at the balance from the previous month when it was $11,000 and applied the interest over the two month period. I paid the bill, but I never went back to discover again.
Why use their crappy middleman for a debit card, why not keep using the one from your bank?
To me the less cards I pack around means less chance of ID theft, accounting mistakes, etc, etc.
I wanted to buy a tv and wrote a check and they refused it even though i had never bounced a check. they said I had no check writing history. so i used my debit card on another account. it was embarrasing and I did nothing wrong other than write a check of which they acknowledged there wasn't anything negative other than there was no history with that checking account. how stupid
Kiss86, As a matter of fact, YES, debit cards are charged a ''swipe fee'' levied on retailers when customers used their debit cards to make a purchase at any retail outlet. This fee is in addition to the ''interchange fee'' that banks charge retailers for ''processing'' those debit card transactions. So even if you don't have a monthly service fee for the account to which your debit card is attached you are still paying one way or another because the retailers have to hike up the prices to cover those cards....this, as a retailer myself, I can assure you. And no checks for 2 years? Do you have automatic withdraw and online banking for all your utilities? It will be a cold day in hell when I give anyone the power to pull moneys from my account other then me. Automatic payments takes your leverage right out of the picture if you ever have an issue with the company to whom you are paying.
I get a kick out of everyone that just want to bash everything. The target card is a check card, it works like a debit card, but allows the retailer to interact with the bank with a low or no transaction fee because it appears to the bank like a check. The benefit is that target doesn't pay the transaction fee of a debit card, and therefore passes the 5% savings to it's customers.
I applaud the retailers innovative approach to saving customers cash.
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