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Most store credit cards don't have much to offer aside from one-time savings, occasional cardholder sales, and a few other perks. The Target REDcard stands out from the competition by offering 5% everyday savings.
Here's what you should know about Target REDcards before you sign up.
What began as the Target Guest Card has now evolved into an entire REDcard portfolio including the Target REDcard store credit card, the co-branded Target Mastercard, the Target-branded debit card, and the American Express Prepaid Redcard.
Image Courtesy of Target. Click to Apply.
All Target REDcards offer the same key benefits. So it does not matter whether you opt of the store credit card, MasterCard REDCard, debit card, or prepaid American Express version.
Personally, I combine the store only REDCard credit card plus savings with the Cartwheel app to save more (and get better rewards) than I could ever manage with any other credit card.
Key REDCard Benefits
Save 5% on most purchases at Target stores and Target.com (some exclusions apply like Target Optical eye exams and gift card purchases)
Free shipping on all orders at Target.com
Additional 30 days to return items beyond the normal return policy
1% donation of your purchase amount to the local school of your choice
REDcard savings can be stacked with coupons, Target Subscriptions, and Cartwheel savings
Target REDcard Store Credit Card
The Target Credit Card is a standard store credit card with a major benefit: 5% off on most spending at Target stores and Target.com. (And you can take advantage of all the other benefits listed in the overview).
It also has no annual fee.
As a store credit card, you get a grace period to pay all charges (rather than having each charge immediately debited from your bank account). But beware: if you do not pay off your balance in full each month, the store card does come with a variable APR of 22.90%.
This happens to be the card I use at Target. Why? I like the 5% off plus other savings via the cartwheel app. That is enough for me - and better rewards than I can get from using any other credit card at Target.
If you are looking to finance a large purchase at Target, neither the store credit card or the REDcard MasterCard will be the way to go - as neither offers an introductory APR offer. Instead, check out this Guide to 0% APR Credit Cards.
Target once offered a co-branded Target REDcard Visa, It has since been rebranded as the Target Mastercard after Target partnered with Mastercard in 2015.
All former Target VISA cardholders have been issued a new Target Mastercard
The Target Mastercard is largely obsolete anyway. It's main benefit is the 5% discount on Target and Target.com purchases which you can already get with the Target debit card. You get no additional benefits by using this card outside of Target.
All REDcard MasterCards are enabled with chip-and-PIN technology. And, like the store credit card version, it comes with a variable APR of 22.90%.
Target Debit and Prepaid REDcards
Target also offers a debit and prepaid REDcard. The prepaid card is offered through American Express while the debit card is linked to an existing bank account for use exclusively at Target.
Target REDcard Debit Card
The Target Debit Card works like a check by drawing money from a linked checking account. This free debit card has no annual fee and it gives you the same REDcard benefits as other cards in the program:
5% discount at Target.com and Target stores
Free shipping at Target.com
30 additional days to return merchandise beyond the standard return policy
American Express Prepaid REDcard
The AmEx Prepaid REDcard is designed for consumers who do not have a bank account. Like other prepaid debit cards, you can add money to the card with Direct Deposit, by linking a debit card, or by adding cash at any Target location. The card offers ATM access and online bill pay and it can be used anywhere American Express is accepted.
The card also comes with the benefits of a Target Debit Card: you get 5% off at Target.com and all U.S. Target stores.
Target Updates All Cards with Chip Technology
At the end of 2015, Target upgraded all of its credit, debit, and store cards with smart card technology to guard against theft and fraud. The new chip-embedded cards require the use of a four-digit pass code instead of a signature. This technology is a much-needed update to the popular REDcard after Target's massive credit card breach in 2013 that left many consumers disenchanted with the retailer.
Redcards Now Come with Chip Technology.
The Target Mastercard will still have a magnetic stripe so it can be used at other retailers in addition to a chip. Target store credit and debit cards, however, will no longer have a magnetic stripe.
The Bottom Line
If you're looking for savings at Target, the Target REDcard store credit card or debit card is a great choice. It has no fees, while giving you a significant savings on every Target purchase.
The Target REDcard MasterCard, however, may not be worth the time. You get the same benefits as the REDcard store credit card.
Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.