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Target REDcard: Is It A Good Value?

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Target REDcard: Is It A Good Value?

The 5% savings this card offers at Target and is hard to beat. It's a better discount than what you can find through even the best reward credit cards.
Editor's Rating: 4.5/5.0

Editor's Rating


The Target REDcard is an excellent card that offers sizeable savings to customers who shop at its affiliated store. The card comes in two varieties - prepaid debit card and credit card. Both of these offer identical benefits, and have the same cost structure. Though this review will mostly focus around the prepaid debit card, we will also discuss the REDcard credit card as well.

Review: Is the Target REDcard Worth It?

The REDcard can provide tremendous savings on purchases with its affiliated store. Since it also doesn't have an annual fee, we believe it to be a good overall value. The most important consideration to make before signing up for this card is its opportunity cost. If you open a REDcard account, you cannot open a Wal-Mart Bluebird or Amex Serve account. If you're a frequent Target customer, this is most likely the best choice to make. However, if you rarely shop at Target, then you can potentially get greater savings by using the American Express Serve® Cash Back.

Good For…Bad For…
Frequent Target customers, due to 5% discountThose who want access to Amex Offers
Use abroad - the card has no FX feesAnyone who wants savings on purchases outside of Target

Out of the three American Express issued prepaid debit cards, the REDcard is the only one without access to Amex Offers - a service that provides discounts and statement credit when shopping at various partnered retailers. If this benefit is important to you, we recommend looking at the other cards instead.

When compared the savings of the REDcard against other cards for an individual with an average household budget, and discovered it performs decently - saving an estimated $279 annually. This is assuming that you spend $3,977 annually purchasing groceries for your home at Target, and buy all your apparel there. The less of these things you buy at Target, the less saving power the card will have.

Target also gives customers the ability to sign up for a credit card version of the REDcard. There are no added benefits to the REDcard credit card, outside of the standard benefits that come from using any credit account - building up your credit history, and the added purchasing power. As with most retail credit cards, the REDcard has very high APR - 23.15%. If you get this card and carry a balance month-to-month, your interest fees will be high, and more than likely negate most of the positive effects of the Target discount.

Bottom Line: If you are a frequent Target shopper, the REDcard provides you with a fantastic offer that we highly recommend. You would be hard pressed to find better savings, even if using one of the top reward credit cards.

Target REDcard Benefits & Features

As mentioned above, the most noteworthy benefit of the REDcard is the 5% discount it provides on most purchases at the store and online at Unlike using a credit card, the REDcard discount is applied at the time of purchase, making the savings immediate. In most card reward programs, this type of benefit works more like a rebate, with the discount being applied after some period of time.

The 5% discount does not apply to:

  • Prescriptions, clinic services at Target and Target Optical™ eye exams
  • Target gift cards and prepaid cards
  • Previous purchases
  • Target credit account payments, Target Debit Card cash back and cash advances on the Target MasterCard
  • Gift wrap and shipping and handling charges on purchases
  • Wireless protection program purchases and deposits required by mobile carrier
  • Where otherwise prohibited by law

In addition to the discount, using the REDcard at also qualifies users to free standard shipping within the United States. Items purchased using the card also receive an extra 30 days for returns, on most items. The only exception to this promotion are items that are already non-refundable, have a fixed return date, or mobile purchases.

As a prepaid debit card, the REDcard is on the cheaper side of things - having less fees than most other cards like it. There are no foreign transaction fees, no monthly fee, and no fees on cash reloads at Target stores.

How Does The Target REDcard Compare To Other Prepaid Debit Cards?

In order to get a clear picture of the REDcard’s value, let's see how it compares to some other leading options.

Note: You may only have one account opened at any time – Amex Serve, REDcard, or Bluebird. It’s fairly easy to switch between the cards, though you will have to go through the application process each time, and therefore pay any applicable fees.

Target REDcard vs American Express Serve® Cash Back

American Express Serve® Cash Back
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The American Express Serve® Cash Back is one of the best prepaid debit cards available to consumers. Every time you shop using it, you receive 1% cash back – a benefit most prepaid debit cards don’t have. Unlike the REDcard, the American Express Serve® Cash Back comes with a monthly fee of $5.95. Therefore, you need to spend at least $595 per month for the card to become more worth it than the REDcard.

For the most part, as long as you do any shopping at Target, the REDcard's 5% discount is likely to trump the 1% cash back rate from the American Express Serve® Cash Back. The only exception to this rule is if you spend over $1,100 per month, and less than 10% is made up of Target purchases.

Target REDcard vs Bluebird

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The key difference between the Bluebird and the REDcard is that the former is eligible for AMEX Offers, and the latter is not. This is a special program for eligible cardmembers, through which they can get access to special discounts on products and services that partner with American Express. The company claims that, to date, card members have collectively saved over $231M through the program.

The other more obvious difference between the REDcard and the Bluebird is their respective affiliations. The Blubird is partnered with Wal-Mart, and therefore offers occasional promotions and savings at Wal-Mart stores. The REDcard, on the other hand, has its special 5% discount towards Target purchases. There is no cross over between the two. Therefore, the store you shop at the most should be the one whose prepaid debit card you get. From a pure fee perspective, both cards are identical - so much so, that some people have affectionately called the REDcard the Redbird.

Comments and Questions

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Info about the following cards: Premier Rewards Gold Card from American Express, Delta Reserve® Credit Card from American Express, Platinum Delta SkyMiles® Credit Card from American Express, Hilton Honors Surpass® Credit Card, American Express® Blue Sky, American Express® Green Card, The Amex EveryDay® Preferred Credit Card from American Express, The Amex EveryDay® Credit Card from American Express, The Plenti® Credit Card from Amex, Blue from American Express®, Platinum Card® from American Express Exclusively for Mercedes-Benz, Bluebird, Centurion® Card from American Express, Hilton Honors American Express Aspire Card, Starwood Preferred Guest® American Express Luxury Card, and Amazon Business American Express Card has been collected independently by ValuePenguin. The issuer did not provide the details, nor is it responsible for their accuracy.

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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® Card 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).

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