Target Credit Card: Are the Benefits Worth It?

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Popular retailer Target currently offers a store-branded card to earn rewards when you make purchases. We’ll look at the benefits and drawbacks of each, and discuss if alternative rewards cards offer a better deal for qualified applicants.

Shop at Target? As one of the most popular big-box stores for general merchandise, Target offers one-stop shopping for all of your needs under one roof. And chances are when it came time to check out, you may have heard the cashier ask if you’d like to save money on your next Target purchase by applying for their retailer credit card, the Target REDcard. Is it a good idea to sign up? Let’s take a look at whether the Target REDcard can earn a place in your wallet with its reward programs and benefits–or, if better credit card alternatives may fit your spending habits.

Overview | Target Credit Cards

To start, the Target REDcard gives shoppers a 5% discount on nearly anything purchased in Target, Target.com, and even the Starbucks located in Target stores. For a $100 purchase, that’s $5. Best of all, these discounts are applied automatically, which helps eliminate complicated rewards programs and confusing rebates by mail.

Another great benefit of the Target REDcard is that it lets you stack discounts to receive additional savings on top of the 5% REDcard discount. As an example, when you sign up for Target subscription service, you save 5% for using the service as well as the 5% for using the REDcard–earning a total 10% discount. Furthermore, savvy Target shoppers should be on the lookout for Cartwheel app discounts, which can range from 5% to even as high as 50% off store merchandise on top of the automatic 5% REDcard discount. However, there’s a slight catch: the 5% Target REDcard discount only pertains to the amount spent on the card after all other discounts are applied. Still, it’s a great offer for Target shoppers.

Considering that the Target RED credit card doesn’t come with an annual fee, it can be a healthy addition to your wallet. Of course, Target throws in quite a few benefits for those that sign up for the Target REDcard, including:

  • FREE 2-day delivery on most purchases made with your REDcard at Target.com
  • Extended return policy: Signing up adds 30 days to the regular 90-day Target return policy (total: 120 days) when you use your REDcard for purchases
  • REDcard Exclusive Extras & Early Access: Gain early access for special events, products, and promotions (such as Black Friday, Cyber Monday, Mother’s Day, etc.). Also, earn “Exclusive extras” including special items, cardholder anniversary offers, and other gifts
  • All Target REDcards are equipped with chip-and-PIN for better security
  • No foreign transaction fees

Target REDcard
Cash Back Benefits5% savings on most Target purchases (applied automatically)
Annual Fee$0
APR25.15% (variable)
Average FICO Score to Qualify615 and above

The Drawbacks of Target Credit Cards

For all the great discounts that the Target RED card offers, there are a few drawbacks associated with this in-store card:

  • First, the Target REDcard is only accepted at Target stores and Target.com. For those that do most of their shopping at Target, that’s not a big concern. However, having another card balance to pay off each month can be confusing for those that carry multiple balances–not to mention there are no rewards programs to earn with for outside purchases.
  • Speaking of balances, perhaps the major drawback of the Target REDcard is that it comes with a hefty APR currently at 25.15%. For those that carry a balance and may not have the ability to make minimum payments, the interest and late fees can quickly outpace the automatic 5% discount. And because those minimum payments are pretty low, you can get stuck in a cycle of carrying debt because you’re only required to pay off so little.
  • Also, if you hope to get a 5% discount on pharmacy purchases, think again: the REDcard 5% store discount does not apply to pharmacy purchases. At one time, this was viable, but since now that CVS runs all Target pharmacies, this reward benefit is no longer in place. For those that fill their prescriptions at Target, they may have to look elsewhere.

It’s for these reasons that you may want to look elsewhere to earn cashback, travel rewards, and so forth.

How Target’s Credit Card Compare to Alternative Programs

Before applying for Target’s credit cards you should explore all-purpose cards that will offer more spending flexibility and favorable rewards programs. Three we recommend are:

Chase Freedom

If you are looking for a card to use on a regular basis then this could be on your list. You can earn 5% cash back up to $1,500 combined purchases each quarter. Chase quarterly calendar provides more information and you have to activate the category to receive cash back. You also get a 1% cash back on all other purchases, and the points do not expire.

The multiple redemption options can be used to encash the value out of the points. By combining points with another card such as Chase Sapphire Reserve or Preferred you could get more worth out of the cash back points. You also get add on benefits like purchase protection, extended warranty, and zero liability. You could be eligible for this card if you have a good to excellent credit score.

Blue Cash Everyday from American Express

Blue Cash Everyday is a simple cash back card for essential categories. You can earn 3 % cash back at supermarkets purchases up to the amount of $6000 per year. Also, a 2% US gas station and departmental stores and 1 % cash back on all other purchases. There are few exceptions as to what stores or gas stations are eligible places where one can earn cash back, to know more you can click here. The points collected can be redeemed as statement credits.

As a new card member, you can get $150 cash back that can be redeemed as a statement credit if you spend $1000 in purchases in the first three months. The card offers a 0% introductory APR for 15 months on purchases and balance transfers. Extended warranty and return protection are part of the benefits on this card. To get approved for this card you require good to excellent credit.

Wells Fargo Propel American Express Card

This is a card with rewards packed for its users wherein you don’t incur an annual fee charge. You get to earn 3x rewards when you dine out or order-in, fill up on gas or subscribe to qualified streaming services. You also earn points on travel when you book flights, car rentals, hotels, homestays and use transit and rideshare options. Besides this, you earn 1x points on other purchases. When you apply for the card you can receive $30,000 in bonus points ($300 cash value) when you spend $3000 on purchases within the first three months.

Wells Fargo Propel card provides cell phone protection coverage. You can redeem the points against travel or cash or gift card. There are no blackout dates on airfare if you book your flights using Go Far Rewards. While many cards charge a foreign transaction fee it is not applicable on this card.

Perks such as return protection, extended warranty, purchase protection, lost luggage insurance, travel accident insurance and car rental loss damage insurance are available to all cardholders. To qualify for this card you must have a good credit score.

The Bottom Line

To sum it all up, the Target REDcard is an opportunity for loyal Target shoppers to earn 5% on in-store and online Target purchases. And for those that combine these discounts with the Cartwheel app and subscription services, cardholders can earn some significant savings if they use Target for a majority of their shopping.
However, with the REDcard’s high APR and lack of flexibility in usage–not to mention a rewards program that only works in Target stores–there simply are better alternatives available.

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