It happens nearly every time you step up to the checkout: the salesperson asks if you’d like to save 10%, 15%, or 20% off your purchase by applying for a store credit card.
Unfortunately, many store-branded credit cards often have high interest rates and low minimum payments, offsetting the discount in the end. That’s why your answer should usually be “No, thanks.”
However, The Target REDcard credit card offers several benefits that may appeal to responsible cardholders who regularly shop the retail giant.
Table of contents
The Target REDcard at a Glance
|Main Benefits|| 5% savings on most Target purchases|
(applied automatically), Free 2 Day Delivery on Online Orders
Applying for the Target REDcard
You can apply for the Target REDcard online or by mail. With the online application, you simply fill out a few forms and submit your information. You may be approved instantly, or your application may require further review. It can take up to 7-10 days to find out if you have been approved for the card.
Potential applicants should have a fair credit history. In general, it looks like a FICO credit score of 615 or higher is recommended but not required.
Other things to note before applying for the Target REDcard Credit Card:
- You must be at least 18 years old and have a U.S. address to apply
- To apply, you’ll need your social security number and one of the following: driver’s license, state ID, or military ID
The Target REDcard credit card is unique in that it gives shoppers a 5% savings on almost everything bought with the card* from Target including groceries, apparel, home goods, and more. The 5% discount even applies to purchases at Starbucks located within Target stores.
Unlike many cash-back credit cards, the Target REDcard credit card applies your discount automatically — no points to earn or rebates to wait weeks to receive. And there’s no annual fee! All Target REDcards are chip-and-PIN cards for higher security.
A special note about pharmacy purchases: Your 5% store discount does not apply to pharmacy purchases. Cardholders used to earn discounts by filling a certain number of prescriptions and paying for them with the REDcard. However, CVS now runs all Target pharmacies, and this specific REDcard reward benefit is no longer in place.
Stacking Discounts: Smart shoppers make an effort to stack discounts and receive additional savings on top of the 5% REDcard discount. For instance, when you sign up to have essentials delivered as part of the Target subscription service, you save 5% for using the service plus 5% for using the card — a total discount of 10%.
Also, look for Cartwheel discounts of 5% to 50% off merchandise on top of the 5% REDcard discount. Take note, though, that the 5% REDcard discount pertains to the amount spent on the card after all other discounts are applied.
Other Target REDcard Benefits/Features
There are a number of additional Target REDcard features you can enjoy:
- No annual fee
- FREE two-day delivery on most purchases made with your REDcard at Target.com
- Target adds 30 days onto the regular 90-day return policy (so 120 days to return) when you use your REDcard
- Early access to special events, products, and promotions like seasonal sales (think Black Friday, Cyber Monday, etc.)
- “Exclusive extras” like special items, gifts, and cardholder anniversary offers (subject to restrictions)
- No foreign transaction fees: Shoppers can make purchases at international Target locations without racking up additional charges
Target REDcard Fees & Drawbacks
The biggest drawback of using a Target REDcard is that it is only accepted at Target stores. Of course, if you already do most of your shopping at Target, that’s not a big deal.
APR: Another caveat is the high APR associated with the card. At 23.90% (variable), this can be extremely dangerous for those who carry a balance. The interest and fees can quickly outweigh the 5% savings.
The Target REDcard usually comes with a pretty low minimum payment that can be paid back over a long period. This means you could rack up a ton of charges on the card, but incur hefty fees due to the high APR since you’re only required to pay off a little at a time.
Late Fee: Target states users will pay a late fee of $24 when any amount due remains unpaid after the payment due date. All subsequent late fees will be $38 until you reach the minimum required payment by the due date for 6 consecutive billing periods.
Returned Payment Fee: Users are charged $27 each time a check or other payment order is not honored by your banking institution.
Are the fees on the Target REDcard worth it? If you’re a responsible cardholder, then yes. If you pay the card in full every month (avoiding the high APR) and make your payments on time (avoiding the late fees), then the card can provide significant value — especially when you consider there is no annual fee.
A Possible Concern: It’s important to note that when you utilize a Target REDcard of any kind, you’re authorizing the company to gather information about your purchases. In turn, Target may then utilize this data to send you coupons and advertisements specifically geared to your spending habits (thus enticing you to spend more at the store).
While Target isn’t the only company with these practices, they’re a major player in the data collection game with illustrious techniques that set the company apart in the retail sector. In other words…they’re very good at this. Whether or not you’re concerned is really up to your personal privacy standards.
Additional Target Card Options
Target REDcard Debit Card: In addition to the REDcard credit card, Target offers another option: the REDcard debit card, which is linked to the cardholder’s checking account.
The Target debit card offers the same 5% savings benefit as the credit card. Additionally, users can withdraw up to $40 in cash-back per transaction. However, since this is a debit card, you can’t use it to build your credit. Plus, the Target debit card is not accepted online, rendering it useless anywhere but actual Target stores.
Target Prepaid REDcard: The Target Prepaid REDcard by American Express can be loaded with funds each month by the user, who can then use those funds like a regular debit card. These funds can be added via bank account, debit card, cash, or even direct deposit from your paycheck. There are no fees associated with adding money to your prepaid card.
Cardholders will receive the same 5% savings benefit at Target stores and Target.com, as well as the Target.com free shipping and extended returns benefits.
Additionally, cardholders receive free ATM usage at U.S. Target stores. Cardholders can reportedly bay bills online to major utility companies, phone providers, or andlords, and can also create subaccounts to manage expenses for other users like family members.
Plus, since the Target Prepaid REDcard is sponsored by American Express, it also gives you access to benefits like purchase protection, a roadside assistance hotline, a Global Assist®Hotline,5 and Entertainment Access®.
Target Mastercard: Some Target REDcard holders may receive a notification from Target to upgrade their Target REDcard to a Target Mastercard.
This upgrade allows users to receive all the standard benefits of the Target REDcard, while also allowing them to utilize the card for standard purchases anywhere Mastercard is accepted. Of course, the 5% discount does not apply to other merchants — it remains exclusive to Target and Target.com.
Alternative Rewards Based Credit Cards
There are definitely lots of excellent options out there if you’re looking for a cash-back credit card that offers rewards.
Plus, these cards can be used virtually anywhere, as opposed to a store-branded card that locks you into one particular retailer.
Here are some examples:
- The Chase Freedom Unlimited® Card gets you 1.5% unlimited cash-back on any purchase (from anywhere) and includes a generous $150 sign-up cash bonus after you spend $500 on purchases in your first 3 months from account opening.
- The Blue Cash Everyday® Card from American Express offers 3% cash-back at U.S. supermarkets (on up to $6,000 per year in purchases; then 1%), 2% cash back at all U.S. gas stations and select U.S. department stores, and 1% cash back on everything else. While Target is not included in the 3% cash-back because it is a ‘superstore’, this is a great card to supplement your REDcard with!
- The Blue Cash Preferred® from American Express offers 6% cash-back at U.S. supermarkets (on up to $6,000 per year in purchases; then 1%), 3% cash back at all U.S. gas stations and select U.S. department stores, and 1% cash back on everything else. Again, while Target is not included in the 6% cash-back because it’s deemed a ‘superstore’, this is a great card to supplement your REDcard with because of all the additional cash-back savings opportunities.
Logging in & Managing Your REDcard Account Online
REDcard holders can access account activity, manage PINs, set alerts, and add authorized users at Target.com/myREDcard.
If you’re environmentally-conscious, this is also where you can enroll in paperless statements.
The Target REDcard offers loyal customers an opportunity to save 5% on purchases, or even more if they look for chances to stack discounts with Cartwheel and Target subscription services.
However, be careful! If you get behind on payments, this card’s high interest rate & fees can negate the 5% savings. It’s best to pay off the balance every month or choose the Target REDcard debit card version instead.
Alternatively, if you don’t spend at Target very often, there’s likely a better cash back card out there for you.
Want to be a REALLY savvy cash-back earner? Combine the Target REDcard with another great option like The Chase Freedom Unlimited® Card, The Blue Cash Everyday® Card from American Express, or The Blue Cash Preferred® Card from American Express. This way you can earn between 1%-6% cash back at tons of other places!
*5% Savings Exclusions:
- Prescriptions, over-the-counter items located behind the pharmacy counter, and clinic services at Target
- Target Optical™ eye exams
- Target gift cards and prepaid cards; Stockpile and Gift of College gift cards
- Previous purchases
- Certain restaurant merchants in Target stores, such as D’Amico & Sons Italian Kitchen, Freshii, and Pret A Manger
- Target credit account payments, Target Debit Card cash-back and cash advances on the Target Mastercard
- Gift wrap and shipping and handling charges on Target.com purchases
- Wireless protection program purchases and deposits required by mobile carrier
- Where otherwise prohibited by law