Target REDcard Credit Card Worth It? How 2021 Offers, Fees and Cashback Points Compare to Other Cards

Last Updated on June 29, 2021

MyFinancialTimes is a reader-centric site. We may receive compensation from the products and services we mention or recommend in this story, but the opinions are the author's own. Remuneration may impact where offers appear. We may not include all available products or offerings. To learn more you can visit our advertising policy and editorial policy.

The Target REDcard is a closed-loop credit card with a lot of potential for loyal Target customers. With a unique rewards program, exclusive offers for cardholders, and no annual fee, there are plenty of ways to make the most of this credit card. Still, it’s not without its drawbacks. Read on to see if Target REDcard is right for you.

The Rundown – Target REDcard Credit Card

There are three versions of the Target REDcard: The Target REDcard debit card, the Target REDcard Mastercard, and the Target REDcard credit card. This review focuses on the Target REDcard credit card, which is only usable in Target stores or online at their website.

All three cards have the same base rewards program, with the difference being that the Target REDcard Mastercard can be used at other retailers. The debit card is connected to a bank account with your money. So it won’t accrue interest on purchases as long as you have the money in your account.

The Incentive: Right now, Target is offering a fairly average initial offer for those approved for the Target REDcard credit card. Until July 17, new cardholders get $40 off a future qualifying purchase over $40 when they’re approved for a REDcard. The offer expires in July, though it’s unclear if Target will make a new introductory offer later in the year. As far as in-store credit cards go, this incentive is lackluster, but it beats not getting a free $40. If you’re thinking about opening a line of credit with Target, now is the time to do it. (Plus, there’s no annual fee!)

Earn rewards in-store and online with the Target REDcard credit card. With a $40 discount on your first purchase, the time to apply is now.
Earn rewards in-store and online with the Target REDcard credit card. With a $40 discount on your first purchase, the time to apply is now. Photo Credit: Brenda Rocha – Blossom / Shutterstock.com

Rewards: The Target REDcard offers some of the most unique rewards we’ve seen for an in-store credit card. Instead of cash back on select purchases, the Target credit card gives a 5 percent discount on every purchase made at Target and at Target.com. It also gives 5 percent when used at any in-store Starbucks locations, or for Target subscriptions, specialty gift cards, top deals, clearance items, and other shipped and drive-up services.

Exclusive Offers: On top of its 5 percent discount, all cardholders get free 2-day shipping on most items at Target.com and free general shipping for all other items. Having a Target REDcard also gives you an extra 30 days on all returns at Target and Target.com, as well as exclusive extras, such as special items and offers.

Icing On the Cake: Every year on your card anniversary, the discount is bumped up to 10 percent, which is a major win if you save up for a big grocery store run or clothes shopping spree.

Don’t Be In The RED

Though the Target REDcard is a penny saver for loyal Target customers (a lot of pennies at that), you could see those savings disappear if you don’t watch your bill. Though there is a 25-30-day grace period for this credit card, leaving an outstanding balance will send you back quite a bit. The ongoing APR is 22.90 percent Variable.  So if you’re used to carrying a balance this card might not be right for you.

The 22.90 percent is definitely a competitive rate compared to other in-store credit cards, however, it’s still relatively high compared to traditional credit cards tied to large financial institutions.

The Verdict

The Target REDcard is a valuable piece of plastic if used properly, but could be detrimental to those savings if your balance is not kept in check. The rewards are straightforward and don’t include confusing cashback programs that require additional work to cash in. The 5 percent discount at Target stores and its website can do wonders for a family who does weekly grocery shopping or those who like to dress up with Target brands.

That 5 percent discount includes subscriptions, in-store Starbucks, and specialty gift cards. This is one of the best in-store credit cards we’ve seen, and beat out others like the T.J. Maxx and JCPenney credit cards.

For those loyal Target customers, the Target REDcard is a perfect option if you’re looking to accrue savings without the additional hassle of cashing it in. The benefit here is that Target stores hold hundreds of thousands of different items, from groceries to electronics, to clothes, which means you only need one card to find discounts everywhere. Just make sure your balance doesn’t stay in the RED.