The Best Store Credit Card: Target REDcard
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Target stores provide a wide variety of household wares, clothing, food, and nearly any other type of everyday item you need. As the second largest retailer in the United States, it only makes sense that it would also offer an equally competitive store credit card. (See also: Store Credit Cards That Don't Suck)
While many store cards lack the benefits that general rewards credit cards provide, the Target REDcard offers convenience and value for Target shoppers. If you are a frequent Target shopper and fan of its affordable merchandise, the Target REDcard Credit (or Debit) Card could come in handy.
Why We Like This Card
- 5% off Target purchases, online or in-store
- Special Target shopping benefits
How This Card Works
If you use the card for your Target purchases, whether online or at a retail store, you'll get 5% off at checkout, on all purchases. You'll also get an extra 30 days for returns and free shipping at target.com. There is no annual fee.
1% Back to Schools.Choose an eligible K-12 school and Target will donate up to 1% of your REDcard purchases to that school.
Special promotions. As a cardholder, you may receive notification of special sales, discounts, and promotions, that you wouldn't receive if you weren't a cardholder. This small perk, provides yet another way in which you can save money when you shop with this card
Chip technology. This card now includes EMV chip technology, which is an embedded electronic chip that provides additional security and protection when you shop with your card. Instead of using the standard magnetic stripe, chip terminals can interact with the chip, which is a procedure commonly preferred and accepted by international retailers.
- $0 Annual Fee
- 23.15% APR
- There is no balance transfer option
Discount on shopping. You get a 5% discount on all purchases you make with the card, whether in store or online. This is an automatic discount that occurs at checkout, which doesn't require accumulating a certain amount or redeeming anything in order to take advantage of the discount. You also receive the discount on all purchases and not just certain merchandise in specific categories, providing a savings on a wide variety of products. This is comparable to a cash back card that gives 5% back on purchases.
Extra days for returns. If you need to return a purchase, you receive 30 extra days to do so when you purchase with this card. Target's return policy is 90 days for unopened items in new condition, but as a cardholder, you receive a little extra time if the product you have purchased doesn't meet your needs.
Donation to education. Target donates up to 1% of all your purchases to the elementary, middle school, or eligible K-12 school of your choice, through its Take Charge of Education program. This donation does not cost you anything and allows you to support education by just using your card for your purchases.
Free shipping. You can not only save money shopping Target's many sales and discounts, but you can also skip the drive to the store and standing in line, by shopping online at Target.com. If you use your Target credit card, shipping is free with no minimum purchase Although other retailers offer free shipping, this benefit sometimes comes with a price. For example, you have to be Prime Member with Amazon.com for free shipping, which costs $99 per year.
Pharmacy Rewards. Target also offers its Pharmacy Rewards program, which provides a discount of 5% off a day of shopping if you fill five eligible prescriptions. This is in addition to the discount you receive as a cardholder. You do need to sign up for Pharmacy Rewards, but it is another method of savings available if you choose.
No balance transfers or foreign purchases. Because this card is a store card and not a Visa or MasterCard, it isn't a credit card that allows you to transfer a balance from another credit card or to make foreign purchases. In fact, you can't use either of the cards anywhere except Target stores. (See also: 5 Best Credit Cards with 0% Intro APR for Balance Transfers)
High APR. The APR of 23.15% for purchases is exceptionally high. If you carry your balance from month to month, the 5% discount you receive for your purchases isn't going to be worth the money you pay in interest. In order to get the most from the card, it is important that you are diligent in paying your balance in full each month and avoid paying interest on your purchases. (See also: 5 Best Low Interest Rate Credit Cards)
Who This Card Is Best For
The Target REDcard Credit Card is best for those who frequently shop at Target stores, especially online where you can take advantage of free shipping. It is also best for those who don't need other credit card benefits such as a balance transfer option or the opportunity to make foreign purchases. Most importantly, because of the APR, the card is ideal for those who consistently pay their balances in full each month rather than carry balances.
Note: The Target REDcard Debit Card provides many of the same benefits but instead of purchasing on credit, the card is attached to your checking account. You can also withdraw up to $40 cash at checkout with the debit card version. Because there are no credit checks required for the debit card, however, it is not a card that will help establish credit.