Anyone who has ever had a bad run in with a store credit card probably has very little good things to say about them. Along with high interest rates, store credit cards have all sorts of creative ways to keep you purchasing more and more stuff from that store. This Target RedCard review is going to proved that there is one exception to the rule.
Target is the second largest retailer in the world behind Wal-Mart, but the rewards you get from the REDcard are definitely something that separates the two of them.
I put together this Target RedCard review to help you get the full understanding of the many benefits that you get by having either the credit or debit card as well as understanding the drawbacks so you can decide if having the card is right for you.
Benefits of Having a Target REDcard
Both the credit and debit cards carry the same advantages when shopping in store or online.
- Discount – You will receive 5% off your purchases whether online or in the store. If you are a regular Target shopper this can really add up over time. For me this pretty much covers the sales tax.
- Free Shipping – You will receive free shipping on all online orders when using your REDcard.
- Extra Pharmacy Savings – When you fill five prescriptions at Target you can an additional 5% off for one day of shopping at target. This stacks on top of the 5% you get with the card.
- Donations for Education – This is an amazing feature. Target will allow you to designate a participating school to receive 1% of your purchases as a donation. Check your local educational institutions to see if they qualify.
- Customized Offers – Target keeps track of your purchases and customizes offers that match your most common interests. This allows you to get extra coupons and deals that really matter to you.
- Special Promotions – Target will run promotions from time to time that are only for REDcard holders. If you do not have one then you get to sit that deal out.
The debit card is a really cool idea for those of us who are credit card averse. It attaches directly to a checking account and does an automatic draft when you make your purchase.
Since this is a debit card and not a credit card you do not get any of the complications that you do with credit. They do not check your credit, there are no late fees, and no interest if you do not pay in full.
The debit cards are chip and pin enabled which means you have the best security that you can get with any type of card.
A final nice feature is that you can withdraw up to $40 in cash from your Target REDcard debit card.
If you are like me and do not like acquiring large numbers of credit cards just for the sake of saving money then get the debit card.
The Target credit card is a store only credit card. This means you can only use it at Target and you do not have the capability of gaining rewards at any other retailer. As with all store cards they will check your credit and establish a credit limit.
****WARNING BORING CREDIT CARD DETAILS****
With any credit card you need to know what happens when you do not pay off the entire balance each month. Here are the details:
- The APR on the card is 22.9% but this can change with the market and the Prime Rate.
- The card has a minimum interest charge of $1 so if you have $3 on the card and do not pay it off then you get a $1 interest charge.
- If you pay late the charge is up to $35
- If a payment is returned the charge is up to $25
- Minimum payments will be low to encourage you to carry a balance
****END OF BORING CREDIT CARD DETAILS****
The only advantage to the credit card over the debit card is that it does not withdraw money directly from your checking account. This means that Target has no access to that account.
Considering the data breaches we have seen with lots of big retailers that is the one thing that worries me about the debit card.
Above everything else, if you get the credit card version of the REDcard, DO NOT CARRY A BALANCE ON THE CARD. With up to 22.9% interest on the card you forfeit any benefit you get in money off by carrying that large of a balance.
If you always pay your card in full each month or opt for the debit card then one disadvantage in the REDcard deal is privacy. If you are a stickler for privacy then the REDcard credit and debit cards are not for you.
When you sign the agreement you agree to let Target collect your information and use it to advertise to you. The agreement also allows your information to be shared with affiliates of Target as well as anyone they want to sell it to.
Now this isn’t as bad as it sounds, They aren’t sharing your personal information (credit report, etc.), but they do share your buying history so that you receive targeted offers from advertisers.
Like all store credit cards the you are probably going to get pretty low credit limits on the REDcard. If you do not have a lot of credit then you could hurt your credit-utilization ratio which has a direct affect on your credit score.
How to Use the REDcard to Save Money
The REDcards, in and of themselves, are only just a bit of savings compared to what you can get through other Target shopping strategies.
What makes the card important to saving money is that it stacks with any other of the deals you can get. Whether it is a coupon, sale item or clearance you can use the card to save an extra 5%.
Target RedCard Review Final Thoughts
The person who will benefit most from the Target RED card is someone who frequently shops at Target already.
If you only shop Target every once in a while then it is not really worth the hassle and if you are someone who tends to overspend or carry a balance then I recommend you stay away from the credit card version.
If you are a regular shopper and a Target deal seeker then I am all in favor of you taking advantage of an extra 5% back on every purchase that you would have been making anyway.