Posted by: John S Kiernan

Rating: 5 / 5

The Verdict: If you’re a fan of Target, you’ve hit the bullseye with the REDcard. This store credit card requires only “fair” credit for approval, does not charge an annual fee and offers savings of 5% on most purchases you make from the store. It also scores you free shipping from Target.com and an extra 30 days to return any Target purchase. The Target REDcard can therefore serve as a conduit not only to lower monthly bills but also to a far more accommodating credit-building environment than you’d enjoy with most non-store-affiliated plastic.

After all, store cards don’t need to charge annual fees or require refundable security deposits to offset the risk associated with lending to unproven consumers because the retailers they represent benefit directly from the purchases that you make. This actually presents an opportunity for those who don’t particularly care for Target from a shopping perspective, considering that you can build credit for free with a no-annual-fee credit card without even using it to make purchases. In other words, if you’re having a tough time finding a “normal” credit card that will approve you, why not give the Target Card a shot? It will certainly do the trick.

Below, we’ll tell you a bit more about where the Target REDcard hits the mark and where it ultimately falls short, particularly as it relates to financing.

The Highlights

• 5% Off Most Target Purchases: Pretty much every purchase you make at Target and Target.com will be automatically discounted 5% if you pay with your REDcard. That’s an amazing benefit, considering everything you can buy at Target — from groceries to electronics. What’s more, this 5% discount can be combined with store coupons, including those from the Target-owned digital-coupon service, Cartwheel, and the 5% discount available via Target Subscriptions, a service that delivers everyday essentials according to a schedule of your choosing. But there are exceptions to this rule (see “The Lowlights” section below).
• 30-Day Extension For Returns: The REDcard is your ticket to a wider return window, extending the standard timeframe during which you may exchange a given item by 30 days. With that being said, it’s important to note that this perk isn’t set in stone. Target reserves the right to discontinue this feature at any time, and the terms and conditions note that “purchases with a fixed return date” and “non-refundable items” are excluded. 

• Free Shipping From Target.com: Any Target.com purchase paid for with your Target REDcard, regardless of the amount, is eligible for free standard shipping to any U.S. state as well as the District of Columbia, Puerto Rico and certain military installations. You’ll obviously have to pay for expedited options, but as long as you’re not in a hurry, this account feature will definitely come in handy. 

• Requires Only Fair/Limited Credit For Approval: As previously mentioned, you don’t need much credit experience to qualify for the Target REDcard. That’s great in the sense that it can serve as a cost-effective credit-building vehicle for people who might otherwise be stuck overpaying for less attractive terms. If you’re curious about where your credit stands, you can get your credit score for free on WalletHub.

The Lowlights

• Above-Average Regular APR: The Target REDcard sports a 23.40% APR, which isn’t the highest on the market but certainly isn’t low, either. In fact, it’s still below the 24.30% average interest rate for store credit cards and just a bit above the 22% average for “fair-credit” credit cards. With that in mind, it’s best to always pay your bill in full when using this card. 

• No 0% Introductory Rates: The Target REDcard won’t give you a break if you need extra time to pay off your purchases. It doesn’t offer any sort of reduced introductory interest rates on new purchases, and it doesn’t even allow balance transfers. Instead, the card’s above-average APR will apply from the jump if you don’t pay your bill in full.

  With that being said, you won’t be missing much if you have limited credit, as none of the other cards for which you would be likely to qualify offer 0% rates, either. But if you have above-average credit and wish to finance a big-ticket Target purchase, this offer obviously leaves a lot to be desired. 

• 5% Savings Exclude Prescriptions & Gift Cards: The fact that you won’t earn rewards when purchasing Target gift cards and Target prepaid cards makes sense. Otherwise, the REDcard rewards program would be all too easy to scam. But the presence of prescriptions and clinic services on the list of exclusions is a bit of a head-scratcher. And if they represent a significant portion of your Target spending, this particular shortcoming could ultimately be a deal-breaker.

Other Things To Consider

• Chip-and-PIN Security: The credit-card industry as a whole is currently engaged in a transformation from the magnetic-stripe security standard to protections based on embedded computer chips. But most credit cards have adopted a system known as chip-and-signature that is widely considered to be a half measure. It provides little benefit to consumers relative to magnetic-stripe credit cards, considering that all credit-card users benefit from $0 liability guarantees. And it won’t work at automated payment terminals abroad, such as you might find in a European train station or parking garage.

  Only chip-and-PIN cards, like the Target REDcard, provide such a benefit. Target was an early adopter of chip-and-PIN plastic following its infamous 2013 data breach. And though cardholders won’t benefit from chip-and-PIN’s global interoperability, its superior security should help keep your personal information safer.

Compared To The Competition

 

	Target Credit Card	Walmart® Credit Card	Best Buy Visa Platinum Credit Card	Amazon.com Credit Card	Capital One QuicksilverOne Cash Rewards MasterCard
Annual Fee	$0	$0	$0	$0	$39
Initial Bonus	N/A	15% discount on purchases made the day you open the account	10% back in rewards on your first purchase 5% back in rewards or special financing for 12 months	$50 Amazon.com Gift Card	N/A
Ongoing Rewards	5% discount on purchases made at Target	3% discount on Walmart.com purchases 2% discount on Murphy USA & Walmart gas stations 1% discount on all other purchases	5% back in rewards on Best Buy purchases 3% back in rewards on purchases made at membership clubs, golf courses, and sporting goods stores 2% back in rewards on purchases made at restaurants, bars, and grocery stores 1% back in rewards on all other purchases	3 points per dollar spent at Amazon.com 2 points per dollar spent at gas stations, restaurants, drugstores and office supply stores 1 point per dollar spent on all other purchases	1.5% cash back on all purchases
2-Year Rewards	N/A	$782	$141	$737	$856
Intro Financing	Not offered	Not offered	0% on Purchases for 6 to 24 months (5% fee)	Not offered	Not offered
Regular APR	23.40%	17.15% to 23.15%	25.74%	14.74% to 22.74%	24.99%
Editors’ Rating	5 Stars	2.5 Stars	4 Stars	4.5 Stars	4.7 Stars
Winner	Target Credit Card		Capital One QuicksilverOne

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