Target RedCard Credit Card Review

Target storefront

Get rewarded with the Target RedCard

If you’re not yet a Target devotee, the Target RedCard might just turn you into one. It offers a cash savings of 5% on most purchases — a substantial amount if you use it regularly — and it comes with no annual fee. The discount program is straightforward, and you’ll get immediate satisfaction through cash discounts when you use the RedCard.

The catch? You can only use it at Target, either in-store or online. It’s a big drawback, but then again, you can pair the RedCard with another credit card to maximize overall rewards and savings.

What to expect from the Target RedCard

  • APR: A variable rate of 24.65% for purchases, but you won’t be charged interest if you pay your entire balance by the due date each month. Your due date will be at least 25 days from the end of each billing cycle.
  • Annual Fee: $0
  • Rewards Rates: You can earn 5% discount at Target in-store and online; you’ll also receive a 10% discount voucher on your anniversary if you sign up.
  • Intro Offer: None

Even better

  • Extra benefits: 10% off on hotels with Hotels.com; apart from standard purchases in-store or online, 5% discount also applies to clearance items, Top Deals, in-store Starbucks, specialty gift cards, subscriptions and Shipt same-day delivery.
  • Exclusive offers: Special items, promotional offers and gifts are available only to cardholders.
  • Extended returns: You’ll receive an additional 30 days to return Target purchases if you pay with your RedCard.
  • Save on shipping: Enjoy free standard shipping on most purchases and free two-day shipping on eligible items.
  • Shop with ease: Add your RedCard to the Target mobile app and access exclusive offers for cardholders. Then use the app to redeem offers and pay for your purchases.

But keep your eyes open for pitfalls

You’ve got to be a raving Target fan to make the most of this card. Not only will you need to buy from Target as often as possible to maximize your discount, you actually won’t be able to use the RedCard anywhere else. The limited acceptance of the RedCard is its biggest drawback, but then again, you won’t be charged an annual fee, meaning it is still handy to have it in your wallet for your next Target purchase. But if you don’t want to have too many cards and would prefer a simple alternative that’s widely accepted, then the Chase Freedom Unlimited is worth considering.

While saving 5% on most purchases will add up over time, there isn’t a traditional rewards program or a welcome offer available with the RedCard. You’ll be better off looking elsewhere if you love the idea of getting cash back or travel rewards from your spending or want to make use of a 0% APR offer.

Another important factor is the high ongoing APR. If you tend to carry balances from month to month, you’ll find yourself paying a lot of interest.

How to maximize your Target RedCard rewards

Clearly, buying from Target as often as possible leads to bigger savings. But if your goal is to lower your ordinary monthly expenses through the 5% discount, you need to stick to your normal spending patterns.

It’s a good idea to download the Target app and add your RedCard on it to get access to exclusive offers and discounts. Don’t forget to take advantage of the 10% off from Hotels.com, and keep an eye out for the latest promotions for cardholders. Of course, what’s really great about a discount program like this one, compared with a traditional rewards program, is that there’s no waiting around to redeem your rewards — you’ll get your cash savings upfront.

You’ll need to repay balances in full each month so you won’t be charged interest on your credit card balance. If you need to buy a big-ticket item, it’ll be worth timing your purchase so that you can give yourself a longer time period to pay off the purchase without incurring interest.

Despite having limited acceptance, the Target RedCard is great for pairing with other credit cards so you can maximize your rewards and savings overall. For example, if you have a flat-rate cash back card like Chase Freedom Unlimited or the Citi Double Cash Card, then you can use your RedCard for your grocery, household and clothing needs, and the cash back card for everything else. Chase Freedom Unlimited offers a cash back rate of 1.5% while Citi Double Cash offers 2%; both come with no annual fee and no caps on the cash rewards.

Bottom line

The RedCard is a winner for Target fans who like to be rewarded for their loyalty or are looking for a way to lower their normal spending on things like groceries and household purchases. It’s got a simple discount program and no annual fee, so it won’t cost you anything to keep it in your wallet. But you’ll need to be disciplined about paying your balance in full each month, or your savings will be wiped out by the high ongoing APR.

While a 5% discount on most purchases is fantastic, this card isn’t loaded with benefits like a welcome bonus or a 0% APR period. If these are important to you, then you should consider a traditional travel rewards or cash back credit card. Having said that, RedCard customers can benefit from exclusive offers and promotions, so it’s worth keeping an eye out for those.

You can’t use the RedCard at other shops or for trips abroad, which means you’ll likely need to pair this card with another one to serve all your credit card needs. If you prefer to carry around a single credit card that’s simple to use and accepted everywhere, then a flat-rate cash back card like Chase Freedom Unlimited or the Citi Double Cash Card will be your best best.