Target REDcard credit card review: Should you apply?

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Target REDcard
Image Credit: Clark.com/Target

Review Summary: The Target REDcard is a store credit card you can use for shopping at Target stores and online at Target.com. The card gives you 5% savings on the majority of purchases at Target, though it also charges a lot of interest if you don’t pay off your card in full by the due date.

Pros

Cons

  • 5% back on most Target purchases in-store or online
  • Annual 10% savings coupon on card anniversary
  • Free shipping at Target.com for cardholders
  • Return window extended by 30 days for most items
  • High 25.15% variable APR interest rate if you don’t pay it off
  • Store cards can harm your credit score
  • Only works at Target

How the Target REDcard credit card works

The Target REDcard is a store credit card from Target. This card offers a valuable 5% discount on all eligible Target purchases. Target also offers a debit card which works as an alternative to the REDcard for those who don’t want to deal with credit.

With this store credit card, you can make purchases at Target and Target.com only. That means the card doesn’t work anywhere else. This card only makes sense if you are a dedicated Target shopper and would get extensive value from the 5% discount.

The card currently charges an interest rate of 25.15% APR, which can change at any time with market interest rates. That’s on the high end for most credit cards. This is why we only recommend this (and any credit card) if you will pay it off in full by the monthly due date. If you do so, you’ll never pay any interest.

While this card charges no annual fee, it offers many benefits similar to what you may see with something like Amazon Prime. Cardholders get free two-day shipping on eligible Target.com purchases, 30 days extra for returns both in-store and online, and 15% off when you subscribe for baby items like diapers, wipes and formula.

Target REDcard review: Table of contents

How to earn rewards

You can earn Target REDcard rewards with every purchase at Target and Target.com. For coffee fans, that includes in-store Starbucks locations too. You’ll get 5% back on all eligible purchases. The Cartwheel program gives you up to 50% off on bonus items. You can also subscribe for a total 10% discount on a wide range of items. Many gift cards are included, giving you an effective 5% off at those restaurants, movie theaters, travel companies and other partners. Just use the card for the eligible purchase and the discount will be applied automatically.

How to redeem rewards

Rewards are applied instantly at checkout when you use the card. There is nothing else to remember or keep track of. That is a nice perk if you have multiple credit cards and keep track of rewards balances across several programs.

Additional cardholder benefits

Benefits for this card are useful to regular Target customers. If you are loyal to Target, these added benefits make the card more useful and lucrative:

  • Free 2-day shipping at Target.com: Like Amazon Prime’s free 2-day shipping, you can get free 2-day shipping if you make a purchase with this card at Target.com. Free 2-day shipping is not available for all items, but it does work for a lot of them.
  • 30-day return extension: It’s a terrible feeling to miss the return window by a few days. Get an entire extra month if you have this card.
  • Subscription discounts: Some discounts give you extra savings if you subscribe for a recurring shipment. This works similar to Subscribe and Save for Amazon loyalists. That is 10% on most items and 15% on eligible baby items.
  • Annual 10% coupon: Once per year, plan for a bigger purchase at 10% off.
  • Deals, perks, and savings: You can get extra coupons and deals that may change over time. Those include Cartwheel deals up to 50% off, 5% off at Target Starbucks locations and 5% off on gift cards.

Alternatives to the Target REDcard

If you are not sold on the benefits of the REDcard, consider one of these great travel or cash back credit card alternatives:

Capital One Quicksilver®

The Quicksilver and QuicksilverOne Rewards cards from Capital One offer 1.5% cash back on all purchases. The Quicksilver Rewards version also offers a $150 welcome bonus after spending $500 on new purchases in the first three months after opening a new account. The Quicksilver card is available to those with excellent credit, while the QuickSilverOne is available to those with average credit or above. QuicksilverOne charges a $39 annual fee. Quicksilver has no annual fee.

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Chase Freedom Unlimited®

This card offers an unlimited 1.5% cash back with no annual fee. The card currently offers a $150 bonus after spending $500 on purchases in the first three months. If you also have a Chase Ultimate Rewards earning card like the Sapphire Preferred or Sapphire Reserve, you can combine your cash back into your points balance at a value of 1 cent = 1 point. Because you can redeem points for at least 1.25 cents each for travel with Sapphire Preferred, that gives you even more value back.

RELATED: The best rewards credit cards right now

Final thought

The Target REDcard makes sense for dedicated Target shoppers who want benefits similar to Amazon Prime without the annual cost. 5% off on every purchase and a 30-day extension on returns are useful benefits for a card with no annual fee. However, you can only use the card at Target and Target.com, and store cards are known to be bad for your credit. If you add in the high interest cost, it may not be worth it unless you can pay off the card in full every month.

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