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Wow- Money With No Credit Check!!!!


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Hey Big Spenders! Visa now has a way for you to use a debit card with absolutely NO credit check. Here's how: You give them your own money. Then, for a $9.95 activation fee, they will activate a debit card for you to use, with the money limited only by how much you gave them! There is a $1.95 monthly service fee, and various fees depending on how you use the card, but, with NO CREDIT CHECK, you can get money that even banks won't give you! You also have to give them your telephone number, which they no doubt sell to telemarketer's, and, yes,just this minor thing, you need to hand over your social security number. Now, I am not sure why they need that, since, after all, you are spending your own money, but maybe they figure that if you were dumb enough to buy the card in the first place, you would be dumb enough to give them your SS number. Sound right?


I'm not sure why cash won't do in the first place, but many people actually buy these things, and they buy gift cards too! No, you just don't give cash anymore. Gift cards are the thing, and they come with their own fees. Even better, tons of people never even use them, so the stores make a real killing.

From the Seattle P-I newspaper:


Retailers find profit windfall -- unused gift cards





U.S. retailers are increasingly finding profits from a new source: Unused gift cards.


Limited Brands Inc. said last week that unspent gift cards contributed $30.4 million to fourth-quarter revenue, boosting profit 4 cents a share. Best Buy Co. reported 4 cents in earnings last quarter from gift cards that it concluded would never be redeemed. Home Depot Inc. in June reported $43 million in pretax profit from cards sold before 2002.


The gains are the result of a painstaking process by retailers to document the portion of gift cards that go unspent every year. More than 10 percent of the $58.3 billion in gift cards bought this year won't be used, according to Needham, Mass.-based consulting-firm TowerGroup. Best Buy, the nation's largest electronics retailer, said it spent more than a year reviewing its accounts before booking the revenue.


"You're going to see more companies in the first quarter taking sort of a catch-up adjustment," said Bill Park, a Philadelphia-based audit partner at Deloitte & Touche LLP. "It's a complicated process understanding gift-card redemption history and the unclaimed-property laws in the various states."


When a company sells a gift card, it initially records a liability on its balance sheet for its obligation to the card's holder. The liability is erased and revenue is recorded when the card is used or expires.


The complications arise when a card is sold with no expiration date and the holder fails to use the entire balance. That could leave a retailer reporting a liability on its books for years. Home Depot, the world's largest home-retailer, said its decision to record unused gift-card sales erased liabilities as far back as 1998, when it first started issuing the cards.


Limited, owner of the Victoria's Secret chain, said the fourth quarter was the first time it recognized unused gift-card balances as revenue. The amount booked includes unspent amounts for its card programs at the Bath & Body Works and Express chains. It will report revenue from other divisions once it has historical data on card usage, the retailer said.


The potential gains for retailers are growing as gift cards become more popular. The International Council of Shopping Centers estimates sales of gift cards increased to as much as $40 billion during the holiday season from $30 billion a year earlier.


The added sales pose a challenge for investors. Rules for sales from the wasted cards give retailers so much flexibility and disclosure is so uneven that the new revenue may make it harder to compare one retailer against another or to track a chain's underlying performance.


Target Corp., the second-largest U.S. discount retailer, records a percentage of each gift-card sale as revenue at the time the card is sold based on an estimate of the amount that won't be redeemed, spokeswoman Cathy Wright said. She wouldn't say what the percentage is or how much it added to sales.


Wal-Mart Stores Inc., the world's largest retailer, doesn't provide any information on its policy for unused gift cards, spokesman Marty Heires said.


Pamela Schlosser of the SEC's office of the chief accountant told an accounting conference in Washington Dec. 5 that retailers can record revenue from unused cards if they can "reasonably and objectively" determine the percentage of gift-card dollars that go unused and the estimated time it takes consumers to spend the cards. SEC spokesman John Heine declined to comment further.


The timing of such decisions may take investors by surprise. Best Buy shareholders were caught off guard when the company booked its unused card revenue Dec. 13. Once those sales were stripped out, investors determined earnings had missed the consensus estimate of analysts by 6 cents a share, sparking the biggest drop in the stock in three years.


"I think people on the street were a little surprised that we weren't given full warning," Alan Rifkin, an analyst with Lehman Brothers Holdings Inc. in New York, said in an interview. "Gift cards are increasing in importance and we think this season will represent 16 percent of sales," up from 12 percent.


The decision to include gift card revenue wasn't intended to mask Best Buy's performance, Charles Marentette, senior director of investor relations, said in an interview. Figuring out how to comply with state laws took more than a year, he said.


"We hadn't mentioned the gift-card revenue previously so analysts didn't see it coming," he said. "But we'd been working on it for a while and the third quarter was the end of that natural process."


From now on, Best Buy expects to recognize revenue from unused gift-card balances of about 2 cents a share each year, he said.


The cards are the No. 1 gift choice in the United States, with 67 percent of consumers last year planning to buy one, up from 55 percent in 2002, according to Deloitte & Touche's holiday survey of 17,447 people. Consumers typically had two gift cards still unredeemed from 2004, the New York-based firm said. Those unused cards were an average 2.2 years old.


For cards without expiration dates or in states that don't allow them to expire, such as Washington and California, the process of recording revenue involves a review of local laws. States such as Massachusetts don't declare property abandoned until three years of inactivity. New Hampshire requires five years.


For Best Buy, the process involved -- for the states that require it -- "demonstrating that you've made every possible step to find these people," Marentette said.


The company had to look at 10 years of gift-card data to demonstrate what percentage was likely to go unused, he said. Because Best Buy cards don't have expiration dates, the company waits two years before declaring the unredeemed portion "broken," or unlikely to be redeemed.


"Truth be known, we'd be happy to remind people they have the gift cards," Marentette said.

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Guest zipperzone

Who ever heard of a credit check for a debit card? If you have $$$ in the bank they just issue the card upon request, don't they.


I would never give someone a gift card. I think it's tacky. Furthermore it restricts the receiver to one store whereas with cash they can shop where ever they wish.


I don't even like giving cash to someone for a present. If I don't know them well enough to know what to buy them, I would wonder why I'm giving them a gift in the first place.

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I do see some merit to this credit/debit card. Parents especially might like this idea to limit the spending habits of their children. Also:


You don't have to carry cash with you.


You restrict and control your own spending habits.


People with bad credit who have lost cards can now have one and not feeling uncomfortable when it comes time to pay the bill.


You can order on-line or over the phone with less fear of someone stealing your credit card number and going on a shopping spree till the credit limit is reach.


Best of all, there are no high interest fees to put you further into debt.

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Friends tell me they use pre-paid VISA debit cards obtained from AAA when traveling abroad. They say it gets them the best exchange rate when taking cash from a local ATM, and there are no ridiculous service charges.


I'll often choose VISA gift cards when cashing in rewards points. I take them to a store where they know me, and they charge the full gift amount to the card and give me cash. I don't have to remember how much of the value I've used and I get the full value.


But I do agree that gift cards for any individual retailer are a huge gamble. They're dropping like flies these days.

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What happens if you have a gift card for a retailer who suddenly goes out of business? I read somewhere that holders of cards have some claim in a bankruptcy proceeding, but you would probably spend more money on the litigation than the card is worth to you.

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"What happens if you have a gift card for a retailer who suddenly goes out of business?"


Charlie, Spend those gift cards fast. Here in NYC, the very large Barnes and Nobles store in Chelsea, 6th Ave between 20th and 21st, has closed. Other locations are still opened but for how long?

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Guest zipperzone

>"What happens if you have a gift card for a retailer who

>suddenly goes out of business?"


>Charlie, Spend those gift cards fast. Here in NYC, the very

>large Barnes and Nobles store in Chelsea, 6th Ave between 20th

>and 21st, has closed. Other locations are still opened but for

>how long?



Barnes and Nobel's problems are due largely to Amazon. A's prices are much better and the books get delivered to your door. No fuss, no muss.

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Guest zipperzone

>zip- what do you give then, if those things are ruled out?


I spend the time to do personal shopping for an article I think the recipient would like. If I don't know him well enough to do that then why am I buying him a gift in the first place?


>If you want to give me something while still avoiding all of

>that, just give me a night with the escort of my choice.


I love you Lucky, but not quite enough to spend $1200 on you :-)

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Pre-paid VISA and MasterCard cards like this one are usually geared toward people who do not have an account at a financial institution. Some of the so-called "un-banked" choose not to use banks, others don't because they assume they can't get an account (low- or no income, no credit history, no experience using them), and still others can't have an account due to previous issues such as repeated bounced checks, debit card abuse, check fraud, etc. The reason they highlight the "no credit check" feature is that their target customers generally don't have good credit or assume that they don't. Given that many banks these days have free checking accounts (there are some that don't even require direct deposit) it is really best to try opening an account instead of going the pre-paid VISA route.


In answer to the question about running credit in order to get a debit card...some banks actually use credit score to determine whether to issue a debit card. They do this because they feel that the likelihood of a person overdrawing their account and not covering the overdraft is correlated to their credit score. I think most banks issue the cards as a matter of course and take them away if they see signs of abuse.

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