December 8, 2018

Target Red Card Review

Read more about Best Credit Cards

Store credit cards have a bad rap. The initial discount you can receive on your purchase sounds amazing, but the high interest rates and fees down the road can eliminate any benefit earned.

Target © Mike Mozart (CC BY 2.0) via Flickr

The Target REDcard may be the diamond in the rough. Yes, it's a store credit card, but it offer benefits that may make it worth your while, especially if you are a frequent Target shopper.

Just how good can yet another store credit card be? Keep reading to find out.

The Two Types of Target REDcards

Before we dive into the specifics of the Target REDcard, you should know that Target offers two types of REDcards.

  • Target REDcard (Credit Card): This is your typical store credit card. You can only use it at Target or It isn't a part of a payment network, such as Visa or MasterCard. Your make your purchases on credit and have the standard grace period to pay them off before interest accrues.

  • Target REDcard (Debit Card): This card is attached to your personal checking account. It works like your bank debit card, pulling the cost of your purchases right from your checking account immediately. There isn't a fee for this card either and you can use it at Target and

When you use either card, you receive a 5% discount on your purchase, but some exclusions do apply.

Purchases Excluded from the 5% Discount
If your purchase includes prescriptions, eye exams at Target Optical, wireless protection programs, shipping charges, Target gift cards, or Stockpile and Gift of College gift cards, you won't receive the 5% discount.

Who Should Get the Target REDcard?

  • You buy your necessities at Target. If you frequently shop at Target, it may make sense to get one of the REDcards and save the 5%. If you don't trust yourself with a credit card that can carry a balance, you can opt for the debit REDcard and still receive the same benefits.

  • You don't like keeping track of points or categories to earn rewards. Some people just don't like watching their spending in specific categories or transferring points to travel dollars. If that's you, you may like the straightforward nature of the Target REDcard. You earn and redeem your "reward" instantly at checkout with the 5% discount and/or free shipping when shopping online.

  • You use the Target subscription service. Target subscriptions offer an easy way to replenish your necessities. You set the schedule on which you want to receive items, such as household essentials, laundry care, and diapers, and you save 5%. This is in addition to the 5% you save with your REDcard, if you use it. You save a total of 10% on your purchases.

Reasons We Like Both Target REDcards

  • You won't pay an annual fee. Since there's no annual fee, you don't have to figure out your break-even point. If you use the credit card, you'll save money on your purchases. Of course, this assumes that you'll pay your balance off in full each month. If you do incur interest charges, you are right back at square one, deciding if the discount is worth the interest you pay.

  • You get a longer time to return or exchange your purchases. As a Target REDcard holder, you may have an additional 30 days to return or exchange your purchases beyond the standard rules. This doesn't apply to non-returnable items or items with a fixed return date.

  • You earn the discount immediately. You don't have to wait for cashback on your statement or via check in the mail. As soon as you swipe your Target REDcard or use it online, you save 5% on the amount due on the spot.

  • There isn't a maximum amount of discounts you can earn. Many reward credit cards limit the amount of rewards you can receive. Target doesn't set a maximum amount of discounts you can receive, though. You can use your card as many times as you want throughout the year, saving 5% with most purchases.

  • You can save 5% on your Starbucks purchases inside your favorite Target store. Your 5% savings extends over to many Target shopper's favorite coffee shops. Just use your Target REDcard to purchase your favorite beverage and you'll save 5%. **This applies only at Starbucks located inside Target stores.**

  • You may receive an anniversary bonus exclusive for REDcard cardholders. If you opt-in to receive marketing offers from Target, you may receive an anniversary offer, such as 10% off your purchase, on the anniversary of your Target REDcard account opening date. In order to qualify, your REDcard must be in good standing.

  • You may have early access to special offers. Target gives REDcard cardholders access to exclusive offers and early access to special offers throughout the year. The specials and timing change, but Black Friday and Cyber Monday tend to be an annual tradition.

  • You may get free shipping. If you shop at with your REDcard, you may be eligible for free standard shipping or free 2-day shipping. Only certain items qualify for the free 2-day shipping, which you can see on the product detail page. This only applies if your order is in before the cutoff time for your area. You can see the details in your cart once you enter delivery information.

  • You can get discounts on specialty gift cards.If you buy gift cards for travel, restaurants, or the movies with your REDcard, you can save 5% on the total. This even applies to Disney gift cards. While it's not a huge savings, every dollar counts, especially on costly vacations, such as Disney World.

A Reason to Consider the Target REDcard (Debit Card):
We like the Target REDcard debit card option because it keeps you in control of your purchases. You can't carry a balance on it because Target deducts the money from your checking account when you make the purchase. You still get the benefit of the 5% discount without the risk of paying inflated interest charges.

Reasons You May Want to Consider Other Credit Cards

  • The 5% discount will encourage you to spend more than you intended. If you find yourself going to Target for "one item" but end up walking out with a cart full of items, this may not be the card for you. While you are getting a "deal" by saving 5%, needless spending can be harmful. Not to mention the interest you'll pay on your credit card if you don't pay the balance off in full.

  • You need your items shipped fast when shopping The thought of free shipping may have you jumping at the thought of getting the Target REDcard, but it's not always as good as it seems. You get free "standard" shipping. This could mean three to five business days (weekends not included). If you need your purchases faster, you'll pay for expedited shipping, which could zero out the discount you received.

  • You want rewards. The Target REDcard doesn't offer any "rewards." Instead, they give you a discount. If you like receiving cashback on your credit card statements or you want to earn travel miles, you won't find it with the Target REDcard.

How It Compares

  • Amazon Rewards Visa Card: The Amazon Visa credit card offers rewards and you can use it at any store that accepts Visa payments. As an Amazon Prime member, you can earn 5% back on Amazon and Whole Foods purchases, 2% back on restaurant, gas station, and drugstore purchases, and 1% on other purchases. If you aren't a Prime member, you earn 3% back on Amazon and Whole Foods purchases, but the other categories remain the same.

  • Amazon Store Card: You can only use the Amazon store card on You do receive 5% back for your eligible purchases, but only if you are an Amazon Prime member. If you aren't, you don't receive cashback for using the Amazon store credit card.

  • Walmart Credit Card: Walmart offers two credit cards - a Visa and a store credit card. With either card, you can earn 3% cashback on your Walmart purchases, including grocery pick-up orders. You can also earn 2% cashback on Walmart and Murphy gas station purchases and 1% on purchases in other categories. Your cashback is a statement credit during the month you earned the rewards.

Bottom Line

If you are a frequent Target shopper, it makes sense to get the Target REDcard (either the credit or debit card). If you choose the credit card, make sure you do so wisely. Try to avoid carrying a balance or overspending just because you get that 5% discount. When used wisely, the Target credit/debit card can help you save money on everyday purchases.

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