Target Redcard Review: Credit Card for Big-box Shopping

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Whether it’s back to school, off to work or out to play, Target has become one of the favorite destinations for folks 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 count among the masses that patronize Target frequently, the card’s perks and benefits should hold appeal as you shop either online or in the brick-and-mortar store. Approval for the Target Redcard isn’t restrictive, as applicants with fair credit profiles often qualify. Let’s take a closer look at many of the pros and cons of the Target RedCard.

CardMatch™

What we like about the Target RedCard

  • You won’t have to put out an extra effort to save money on almost all items. Earn an automatic 5% discount on products purchased in-store or online.
  • Online shopping won’t keep you waiting or cost you extra. Cardholders enjoy free two-day shipping on all eligible orders.
  • Ordinarily, you’d have 90 days to return an item. Target Redcard holders are allowed an extra 30 days on returns (but some items may be excluded).
  • By signing up to receive informational emails from Target, cardholders will receive a 10% discount coupon on their card anniversary date.
  • Access your account from anywhere at any time using the Target site or mobile app, which is a huge convenience these days.
  • Making contactless purchases and checking balances on the fly is a snap with the Target mobile app.
  • Get out in front of the pack when it comes to valuable deals and promotions. You’ll receive advance notice of special offers available only to cardholders.
  • Save 10% when you make a hotel reservation with Hotels.com.
  • Your 5% off also works at in-store Starbucks locations and when you purchase specialty gift cards.

Things to consider

  • The card is limited in terms of purchasing power. You can only use the RedCard at physical Target locations or the company’s website.
  • Perks and benefits are narrow in scope. You won’t accumulate any points, miles or cash back that can be redeemed for statement credits, travel or gift cards.
  • If you choose to carry a balance from month to month, the high APR will wipe out any discounts received and have you ultimately paying more than market value for common products.
  • The discount doesn’t apply to all departments within Target locations. Products such as prescription medications in pharmacies or gift cards aren’t eligible for the 5% savings.
  • Any of the purchase protections afforded to Visa, Mastercard or Amex cardholders aren’t extended to owners of the RedCard.
  • You won’t have much incentive to pick up the RedCard outside of savings from frequent Target shopping. There’s no available welcome bonus, intro APR or 0% interest balance transfer option.

Store card details

The big allure of the Target Redcard is the automatic savings you’ll receive with each swipe, chip-dip or online purchase. To make the most of the 5% discount, you might want to change some shopping habits to direct as much everyday spending as possible to the retailer.

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% cash back 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 cash back, and 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.

Fee details

If incurred, fees can eat into your accrued Target savings amounts, but from the get-go, you won’t pay an annual fee to own the card. Should you make a late payment, it will set you back $40. A returned payment will cost you $29. There is no penalty APR, but the regular purchase APR sits pretty high in contrast to some of the RedCard’s competitors. So, if you plan to carry a balance and pay off the debt over a long time period, any discounts you may have earned will be decimated by interest charges.

How does it compare to other store credit cards?

You may want to consider other store credit cards when choosing which one best suits your needs. Competing cards from retailers such as the Capital One® Walmart Rewards™ Mastercard® only offer a bonus cash-back reward in the first year on in-store Walmart purchases. After that, the reward only applies to online purchases. The Costco Anywhere Visa® Card by Citi will be more difficult to obtain as it requires an excellent credit score and a Costco membership is required to qualify.

Card NameAPRAnnual FeeIntro BonusCredit NeededKey Features

Card Name APR Annual Fee Intro Bonus Credit Needed Key Features
Target RedCard See Terms None None Fair
  • 5% discount on in-store and online eligible Target purchases
Capital One® Walmart Rewards™ Mastercard® See Terms None None Good to excellent
  • Unlimited 5% cash back on purchases online at Walmart
  • Unlimited 2% cash back on Walmart store purchases, 2% back on restaurants and travel and 1% back on all other purchases
Costco Anywhere Visa® Card by Citi See Terms None None Excellent
  • 4% cash back on gasoline up to $7,000 annually and 1% thereafter
  • 3% cash back on restaurants and travel
  • 2% cash back on all Costco purchases
  • 1% cash back on all other purchases

The bottom line

Store cards like the Target RedCard have their place in your wallet, but you’ll get the most out of them if you’re a loyal and frequent shopper at the huge retailer. Should you be disciplined enough to buy most of your grocery and sundry items at Target, the 5% discount will be beneficial, provided you don’t carry a balance and pay on-time. However, if you desire travel, points or cash-back rewards, you’ll have to check out our other credit card reviews for options offered by the major issuers, which put forth more well-rounded cards overall.

Related articles

For rates and fees of Blue Cash Everyday® Card from American Express, please click here.

Please Note: Information about the Capital One® Walmart Rewards™ Mastercard®, Costco Anywhere Visa® Card by Citi and Target RedCard have been collected independently by TheSimpleDollar.com. The issuer did not provide the details, nor is it responsible for their accuracy.

Editorial Note: Compensation does not influence our recommendations. However, we may earn a commission on sales from the companies featured in this post. To view a list of partners, click here. Opinions expressed here are the author's alone, and have not been reviewed, approved or otherwise endorsed by our advertisers. Reasonable efforts are made to present accurate info, however all information is presented without warranty. Consult our advertiser's page for terms & conditions.

Thom Tracy
Thom Tracy
Contributing Writer

Thom Tracy is a personal finance writer from Scranton, Pennsylvania with 28 years of experience in the insurance, employee benefits and financial services industries. His work has appeared in QuickBooks and Investopedia. In his spare time, Thom likes to cook, hike and discover new music.

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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