Store cards can honestly be hard to justify: How often will you really be at that store? Can you really use the reward points the card gives you?
When it comes to the Target REDcard, though, many can answer the first question with, “I practically live at Target” and the second with “Yes, I can use an instant discount at the register.”
Even though we think the Target REDcard stands out among store cards, read this review before you apply. While it has no annual fee, you’ll have to have your credit pulled to get it. So make sure it’s worth the credit pull.
The Target REDcard is issued by TD Bank and is a store-only card. There’s a debit-card version and a credit-card version (this review deals with the credit card). There’s a MasterCard version as well, but it’s currently (as of Dec. 16) not available to new applicants, according to the REDcard application page. This means you’ll be able to use your REDcard in-store only.
The Target REDcard doesn’t reward points you can cash in later. Instead, it offers an instant 5 percent off at the register. There are some exceptions, however, including prescriptions, eye exams, gift cards and some food vendors inside the Target store.
Getting an instant 5 percent off is convenient and effortless. It’s also noteworthy because you can’t easily get bonus rewards (cash back, miles) from Target stores with any other rewards credit cards. Target tends to be excluded from other cards’ “department store” categories and from their “grocery store” categories, even though some targets sell groceries. Some cards have bonus-shopping portals and deals programs that partner with Target to give cardholders extra rewards, but that takes extra effort (clicking through from your online banking site, for example, or activating a deal).
The card gives loyal target shoppers the following additional perks:
- More time to make returns: Cardholders have an extra 30 days (beyond the original return policy) to return merchandise.
- Free shipping: Cardholders get free standard shipping at Target.com. That’s good for all 50 states and Puerto Rico.
Caveats to consider
The Target REDcard is a stand-out store card. But it’s still a store card. That may mean the following:
- Your credit limit may be low: Store cards are known for giving “toy” limits of as little as a few hundred dollars. If having a large limit is important to you, go for a traditional bank credit card.
- The APR will be high: Store cards are in the business of dealing with risky consumers and hike their interest rates accordingly. So if you plan on carrying a balance, use a low-interest credit card instead.
- The card doesn’t have any introductory financing: Many store cards offer an intro period during which interest is delayed. This can be useful if you’re buying something pricey, such as electronics or furniture. The Target card doesn’t offer a 0-percent-interest intro period, though. If you’re about to drop a bunch of money at Target and want to pay it off with no interest, look into getting a card offering 0 percent interest on purchases for the first several months.
Why it got 3 out 5 stars
The rating for the Target REDcard credit card was based on our standards for store credit cards.
It gained stars for its rewards program, lower-than-average interest (compared to other store cards) and ongoing perks for loyal shoppers. It lost stars due to its lack of financing and inflexibility (it can be used only at Target). That said, because the card has no annual fee, having it in your wallet just for Target purchases is still a boon, due to the 5 percent savings.
Target REDcard rating
|Offers introductory interest-free financing: This card does not offer any 0 percent financing on initial purchases.|
|Offers ongoing rewards/discounts: This card offers 5 percent off at Target for the life of the card.|
|Fair interest terms: This card has an APR that is below the average store card APR (according to CreditCards.com's latest retail card survey)|
|Consumer-friendly incentives: This card offers free shipping at Target.com and extended returns for cardholders.|
|Can be used anywhere: Currently, this card can be used in-store only.|