Target REDcard Review
Five Percent Off at Target Stores
Anyone who's shopped at Target has no doubt been offered the Target REDcard, Target's credit card that lets you save on each purchase. If you're thinking about getting the Target REDcard, here's what you need to know.
Perks and Benefits of the Target REDcard
You get a 5% discount on purchases at Target and Target.com whenever you use your Target REDcard for purchases. This isn't a rewards program where you accumulate a certain amount of cash back to use for future purchases.
The discount is automatic. You don't have to sign up, enroll, or make a redemption to get the benefit.
The Target REDcard even beats most other store credit cards, which only offer a discount on purchases you make the first day you open your account. Instead, the Target REDcard gives you a discount every date from the day you open the account forward. (Unless they decide to change the program terms, of course.)
If you're a regular Target shopper, the 5% discount is tremendous. You'll save $5 for every $100 you spend in Target. Target lovers know how easy it is to spend upwards of $100 in a single trip, even when you were planning to only pick up a jug of milk.
Not all your Target purchases will qualify for the discount. This includes Target Optical eye examples, gift cards, previous purchases, and other items defined in the REDcard program rules.
Additionally, you get free shipping on Target.com purchases when you use your REDcard as long as you choose standard shipping.
You'll have to pay for upgraded shipping methods.
There is also no annual fee on the Target REDcard. That means you can enjoy discounts on all your Target purchases at no cost as long as you pay your balance in full each month.
Target REDcard Pricing
While you won't pay an annual fee on the Target REDcard, there are penalty fees based on how you use your card.
There's a late fee of up to $38 when you're late on your monthly minimum credit card payment and a $27 returned payment fee if your bank returns your credit card payment. Purchases are charged a 23.40% APR.
What to Watch Out For With the Target REDcard
The APR is fairly high. As with all credit cards, especially rewards credit cards, you should pay your balance in full each month to avoid finance charges and to get the full benefit of your 5% discount. Never get complacent and make the minimum payment.
If you're a big Target shopper, having a credit card that you can use in your favorite store might tempt you to overspend. Watch your spending the same way you would if you were using your checking account. After all, you have to be able to afford to pay your balance in full each month.
Pay attention to your credit utilization. Store credit cards often come with a low credit limit and are easy to max out. Keep your credit card balance below 30% of the credit limit, especially around your account statement closing date, so your credit score isn't impacted by a high balance.
Edited by LaToya Irby. Credit card terms and sign-up bonuses are subject to change from the time of this review. Refer to the application for current terms and conditions.