Target REDcard: Is It A Good Value?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer.

The Target RedCard Credit Card is a money-saving option for shoppers who frequent Target stores or Target.com. While this card doesn't offer rewards, it does offer discounts on Target purchases, along with other valuable benefits such as free shipping and an extended return window.

Target RedCard Credit Card Review: Ideal for Saving Money on Target Runs

The Target RedCard Credit Card is well-suited to people who prefer Target to other big-box retailers and prefer upfront savings to cash back or other rewards. Every time you shop at Target stores or on Target.com with your Target RedCard Credit Card, you receive 5% off your purchase, which includes clearance items and Target top deals of the week. There are some limited exclusions, including prescriptions and pharmacy counter purchases, Target gift cards and prepaid cards, and eye exams conducted at Target Optical.

The 5% discount does, however, apply to specialty gift card purchases, subscriptions for everyday essentials deliveries, and purchases made at Starbucks locations inside Target stores. Target RedCard Credit Card members also get exclusive access to discounts, sales and other offers to increase savings on Target purchases. All of these benefits are available to card members with No Annual Fee.

The purchase APR on the Target RedCard Credit Card is 24.65% (variable), so be sure to pay off your balance in full every month or you’ll incur some hefty interest charges on any balance rolled over.

Free 2-Day Shipping on Target.com Purchases

The Target RedCard Credit Card is a great choice for shoppers who want fast, free shipping on purchases. Cardholders enjoy free two-day shipping on thousands of items sold at Target.com, which can be especially helpful when trying to save money and time around the holidays.

Items that don't qualify for two-day shipping are still eligible for free shipping when you buy them with your Target RedCard Credit Card. Note that if you upgrade your shipping method from standard shipping, or you make purchases from Target.com that are delivered by Shipt, additional shipping and delivery fees may apply. You do still save 5% on same-day delivery items from Shipt.

Take Advantage of Extended Returns

If you buy an item at a Target store or online using your Target RedCard Credit Card, you also get more time to make returns. Target allows cardmembers an extra 30 days to return items purchased with their cards, beyond the standard return policy window allowed for that item. So, if you purchase something from the electronics department, you'd have an extra 30 days on top of the 30 days already allowed to return those items.

There are only two exceptions to the extended return program: Target Optical purchases and nonreturnable items. Any purchases that fall into those categories wouldn't get the benefit of the longer return period.

Save Even More on Card Anniversaries

While Target RedCard Credit Card cardholders save 5% on Target purchases daily, they receive 10% off on their card anniversary as an exclusive savings offer.

This bonus isn't automatic, however. To qualify for the additional 10% savings, cardholders must be signed up to receive Target marketing emails, and their Target RedCard Credit Card account must be in good standing.

Pair Target RedCard Credit Card Savings With the Target App

Target shoppers can use their Target RedCard Credit Cards along with the Target app to unlock exclusive offers and deals. Here's how it works:

  • Download and install the Target app.
  • Link your Target RedCard Credit Card to the app.
  • Browse offers in your Wallet in the “offers” tab.
  • Choose the offer you want and give the barcode to the cashier at checkout.

These offers are only available for in-store shopping, but Target offers other savings opportunities for shopping online.

Exclusive Extra Offers Add to the Card's Appeal

Aside from the benefits already mentioned, Target RedCard Credit Card cardholders can take advantage of special extras. These extra offers vary and can include perks such as discounts at partner merchants or exclusive access to limited edition merchandise.

For example, one of the more recent offers included a 10% savings on hotels booked through Hotels.com when you linked to the coupon from your Target RedCard Credit Card account. That could be a tempting benefit for shoppers who are interested in saving money on holiday travel.

ValuePenguin's verdict: A Good Choice for Loyal Target Shoppers

The Target RedCard Credit Card could be an obvious credit card choice for people who routinely shop at Target and want to save 5% on those purchases. Since the 5% off discount also applies to specialty gift cards, including Disney gift cards, the Target RedCard Credit Card could be a great choice for stocking up on gift cards at a discount.

No Annual Fee, free two-day shipping on eligible purchases and the extended return period are also nice incentives to sign up for the card. When deciding whether the Target RedCard Credit Card is right for you, think about how often you shop at Target stores or Target online and how much you could potentially save by getting 5% off each time.

Alternatives to the Target RedCard Credit Card

While the Target RedCard Credit Card does have plenty of features to like, there are a few reasons you might think twice about getting this card: For one thing, it's only good at Target locations, meaning you can't use it to shop at other retailers. You may also prefer earning straight cash back that you could apply as a statement credit or deposit into your bank account to getting a 5% discount when you spend. This card also has a fairly steep 24.65% (variable) annual percentage rate, which could eat into any money you're saving with the discount if you carry a balance from month to month.

With that in mind, we've highlighted a few other rewards card options you may want to consider instead.

Unlimited Cash Back With a Cashback Bonus Offer (Chase Freedom Unlimited®)

Our Thoughts The Chase Freedom Unlimited® card makes earning cash back rewards easy, with unlimited 1.5% cash back offer. There are no rotating quarterly bonus categories or varying rewards tiers to manage. Eligible card members can earn $200 cash back after you spend $500 on purchases in your first 3 months from account opening Cash back rewards don't expire, and they can be redeemed for cash, gift cards, purchases at Amazon.com or travel bookings through Chase Ultimate Rewards.

This card comes with a $0 annual fee, and it offers an introductory 0% APR on purchases and balance transfers for the first 15 months, then a 16.49% - 25.24% Variable APR. That's a benefit you won't get with the Target RedCard Credit Card. In a nutshell, the Chase Freedom Unlimited® may be more appealing than the Target RedCard Credit Card for people who want to earn cash back everywhere they shop and spend, with a $0 annual fee. And with several ways to redeem rewards, this card can offer flexibility and convenience for saving on shopping or travel.

Double Your Cash Back With Ease (Citi® Double Cash Card – 18 month BT offer)

Citi® Double Cash Card

  • On Citi's Secure Website

No Annual Fee

13.99% - 23.99% Variable

Excellent

  • Earn cash back twice. Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
  • To earn cash back, pay at least the minimum due on time.
  • Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% - 23.99%, based on your creditworthiness.
  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 13.99% - 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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Our Thoughts

The Citi® Double Cash Card – 18 month BT offer card takes a unique approach to cash back rewards. With this card, members Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay. There are no limits on the amount of cash back you can earn, no rotating quarterly bonus categories and no rewards tiers to manage. It's cash back rewards made simple, with rewards redeemable for checks or statement credits.

This card doesn't offer an introductory rewards bonus, but it does offer a 0% introductory APR on purchases and balance transfers for the first 18 months, then a 13.99% – 23.99% (Variable) APR on purchases. Balance transfers don't earn cash back. This card might be more attractive than the Target RedCard Credit Card for people who are planning to make a large purchase or transfer a balance and need time to pay those amounts down, without incurring interest charges for more than a year and while paying a $0 annual fee. While the 2% cash back rewards rate is less than the 5% discount the Target RedCard Credit Card offers, those cash back rewards can be earned on purchases anywhere, not just Target.

Earn 5% Cash Back Each Quarter (Discover it® Cash Back)

Our Thoughts

The Discover it® Cash Back card offers 5% cash back in rotating bonus categories, up to the first $1,500 in combined purchases each quarter you activate. After that, you continue earning 1% cash back until the next quarter's bonus is activated, and you also earn unlimited 1% cash back on all other non bonus category spending. Discover matches all the cash back you earn in your first year of card membership (for new card members only).

Cash back rewards never expire and you can redeem as you like. What's nice about this card that you might appreciate if you do a lot of shopping online is the opportunity to earn 5% cash back at partner retailers. This category bonus typically applies during the last three months of the year, just in time for the holidays. Throughout the rest of the year, you may be able to earn 5% cash back at gas stations, supermarkets or restaurants. That could make this card a better fit than the Target RedCard Credit Card for someone who primarily charges everyday spending to their card, not just shopping.

Compare Other Cash-Back and Rewards Cards Before deciding on a card, use our credit card comparison tool to see what you could potentially earn in rewards. You can adjust the numbers based on your spending habits to get an estimate of how rewarding each card may be.

The information related to the Chase Freedom Unlimited® has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.

Joe Resendiz

Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).