Whether it’s back to school, off to work or out to play, Target has become one of the favorite destinations for people seeking everyday items. Like most other big-box retailers, the store offers consumers a way to bag some extra savings through its credit card offering, the Target RedCard. If you’re a frequent Target shopper, either in-store or online, the card’s perks and benefits should hold appeal. Approval for the Target RedCard isn’t restrictive, as applicants with fair credit often qualify. Also: The best store credit cards Let’s take a closer look at many of the pros and cons of the Target RedCard.
The Target RedCard Save on your Target purchases card highlights intro bonusGet a coupon for $40 off a qualifying purchase over $40 when you are approved for a debit or credit RedCard in-stores and at Target.com between 09/18/22 - 10/08/22 APR25.90% Variable recommended creditGood/Excellent reward rates Save 5% in store and online at TargetFor each eligible purchase you make in gas or dining merchant categories, you earn rewards at a rate of 2% of the eligible purchase amount.For each eligible purchase you make at a merchant that is not in a gas or dining category, you earn rewards at a rate of 1% of the eligible purchase amount. annual fee$0 intro purchase APRN/A rewards & redemption details Save 5% in store and online at TargetFor each eligible purchase you make in gas or dining merchant categories, you earn rewards at a rate of 2% of the eligible purchase amount.For each eligible purchase you make at a merchant that is not in a gas or dining category, you earn rewards at a rate of 1% of the eligible purchase amount. The Target RedCard isn’t complicated to use or to benefit from. Use it to cover your Target shopping spree to receive a 5% discount on the bill. However, there are a few purchases that don’t qualify for the discount, like prescriptions, eye exams, and gift cards. But most everything else is fair game.The 5% discount is the card’s main draw, but it comes with a few more useful perks as well. These include extended returns, free 2-day shipping, and exclusive cardholder-only offers. Target even has an app where cardholders can manage their account and make contactless purchases.Pros5% discount on purchases (including in-store Starbucks)Free 2-day shippingExtended returnsConsHigh APR (typical for store cards)Can only be used at TargetNo shopping protections The Target RedCard View now
[This article was first published on The Simple Dollar in 2020. It was updated in March 2022.] The 5% discount is the card’s main draw, but it comes with a few more useful perks as well. These include extended returns, free 2-day shipping, and exclusive cardholder-only offers. Target even has an app where cardholders can manage their account and make contactless purchases.
Pros
5% discount on purchases (including in-store Starbucks)Free 2-day shippingExtended returns
Cons
High APR (typical for store cards)Can only be used at TargetNo shopping protections
With rewards cards from major issuers, you’ll often witness big bonus incentives in categories such as groceries, but this category is usually capped through spending limits. For example, the Blue Cash Everyday® Card from American Express gives you 3% cashback at U.S. supermarkets up to $6,000 annually and 1% after the limit is reached. Assume you spend $10,000 per year in grocery stores. With the Blue Cash Everyday Card from American Express, you’d receive $220 in cashback. With the RedCard, that same dollar amount would fetch you $500 in savings. Thus, making Target your primary pantry-stocking destination gives you an advantage over some non-store cards. However, not every Target offers groceries. It’s a good rule with credit cards to try to pay off your statement balance in full every month in order to avoid interest charges. Also: Why you shouldn’t sign up for store credit cards Consider a non-store card instead. Often times, they have a lower APR, better perks, and can be used at more than one location. For example, the Wells Fargo Active Cash® Card offers 2% cash rewards on purchases, carries no annual fee, features a generous intro APR for purchases and qualifying balance transfers, and comes with Visa Signature protections.If you’re looking for something with a bit more reward potential, consider the Blue Cash Preferred® from American Express. It does have an annual fee of $95 ($0 intro annual fee for the first year), but it earns 6% cash back at U.S. supermarkets (up to $6,000 spent annually, then 1%) and on select U.S. streaming services. It also earns 3% on U.S. gas stations and transit. Even by spending as little as $2,000 per year on groceries would net cardholders $120 in rewards, more than enough to cover the ongoing annual fee. And that’s without taking its other bonus categories into consideration.
