Target Redcard review

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The Target RedCard credit card – courtesy of the upscale discount chain that launched a thousand memes – offers straight-forward rewards in the form of an automatic 5 percent savings on just about everything Target sells in-store and online. Savvy shoppers will also love the ability to stack even more discounts on top of those rewards by way of Target’s Cartwheel app.

But like most store-branded cards, there’s a catch (or two): With an APR of 22.90 percent, less-than-responsible cardholders could end up owing more than they can afford when carrying a balance from month to month. Plus, Target addicts expecting an enticing sign-up offer will be left sorely disappointed.

Clear-cut rewards

If you scoff at the idea of rotating bonus categories or having to update your earnings preferences every few months, you’ll appreciate the Target RedCard’s no-nonsense rewards policy. Cardholders enjoy a 5 percent discount on most Target and Target.com purchases. (Some categories of purchases are excluded, such as gift cards and certain restaurant merchants in Target stores.) The discount is applied automatically at the register or online checkout – you don’t have to obtain a certificate or wait until a future purchase to use it.

The RedCard can only be used at Target and Target.com, so you won’t earn any rewards on purchases made elsewhere. The retailer does offer a MasterCard, though it’s not something you can apply for outright. It’s considered an upgrade Target might offer you later. However, despite the ability to swipe the card anywhere MasterCard is accepted, the only added perk you’ll receive is no foreign transaction fee. While that makes the Target MasterCard a good option for international travel, all it really means is the opportunity to incur more debt at the same high interest rate.

Target’s Cartwheel app

Target aficionados are undoubtedly well-acquainted with the chain’s free Cartwheel app, which lets you filter and save in-store Target coupons without having to worry about printing paper coupons. Discounts range from 5 to 50 percent off (or specific dollar amounts for one-time use) and can be searched by category or collection. You can also hunt for specific product offers by scanning the item’s barcode or typing its name into the app’s search bar. Once you’ve added one or more offers to your Cartwheel list, the app will generate a personal barcode you can scan at the register for immediate savings.

By paying for your purchases with the RedCard, any discounts found via the Cartwheel app are instantly combined with the card’s 5 percent discount (as well as any manufacturer or Target mobile coupons you might have). Further, you can sync the app with your RedCard to make it even easier to save.

New perks for card members

In addition to automatic savings, the Target RedCard comes with free standard shipping on Target.com items (free 2-day shipping on eligible items), plus 30 extra days (beyond the standard 90) to return both in-store and online purchases. When you use your RedCard to pay for Target Subscriptions – a program that delivers you everyday essentials on a set schedule so you never run out – you’ll enjoy an additional 5 percent savings on top of the free shipping and 5 percent discount that already applies to all subscription orders.

Also, Target recently layered on some new perks to try to boost the appeal of the card. You now get early access to special events, products and promotions, and extras including special items and offers, plus a 10 percent off coupon on your card anniversary each year. Time will tell whether these special events and promotions hold much value, but this is at least an incentive to sign up for the card besides the 5 percent discount.

The RedCard also includes a free Target Circle membership (also available to all customers with an online Target or Cartwheel account). Target Circle members get 1 percent back on most Target purchases (alcohol, prescriptions, gift cards and dairy products are among the excluded items). While the money earned cannot be redeemed for cash back, it can be transferred to a Target wallet and used as a discount in the future.

Unfortunately, combining the RedCard with Target Circle won’t get you any extra money back. You’ll still earn the standard 5 percent back on all purchases. You will, however, be able to take advantage of some of the program’s transaction benefits, including Community Giving Program votes, which you can use to give a local non-profit a chance at a grant from Target.

High APR

Regardless of an applicant’s credit score, the Target RedCard has a flat (and hefty) APR of 22.90 percent. Even with no annual fee, the APR is much higher than what you’d find with a general-purpose rewards card. If you’re worried about running up avoidable interest charges, consider opting for the Target debit card instead. Since the debit card uses your existing checking account to pay for Target purchases, it eliminates the risk of accruing unmanageable debt while still giving you the benefit of the credit card’s 5 percent discount and other perks.

Why get the Target RedCard?

• You go to Target intending to buy toothpaste and toilet paper, but walk out with two carts’ worth of merchandise instead.
• You’re a bargain shopper who already uses Target’s Cartwheel app for added savings.
• You want to save money on everyday purchases conveniently delivered right to your door.
• You don’t plan to carry a balance from month to month.

How to use the Target RedCard

• Download Target’s Cartwheel app to stack discounts on top of the RedCard’s automatic 5 percent rewards.
• Save even more on necessities by using the RedCard to pay for Target subscription orders.
• Pay your balance in full every month to avoid paying higher-than-average interest.
• Visit the RedCard page to see the latest deal for card members, and sign up for emails to be alerted about exclusive offers, events and promotions.

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