Kevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Written By Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Banking Writer Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
| Credit Cards Editor
Updated: Jan 22, 2024, 8:06am
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For many shoppers, Target is irresistible. Its fair prices and wide variety of products have garnered a loyal following. The internet is full of running jokes about stopping in for one thing and walking out an hour later with a full cart. Customers are so obsessed there’s even a viral “Husbands of Target” YouTube video.
Whether you’re the type of customer who heads to Target for household goods or someone who loves popping in for opportunistic shopping, there’s one thing everyone can agree on. A discount here goes a long way, and the Target Circle™ Credit Card * is one of the easiest ways to get one.
Plain and simple, the RedCard is Target’s store card. Stores tout the primary benefit being 5% off on purchases at Target in store or online purchases at Target.com. There are no limits on your total earnings and no annual fee. If you spend $500 per month at Target, that adds up to $25 in savings (or $300 per year). That’s easy to do for households that regularly buy groceries, clothing or household items from the store.
Beyond a large discount on Target purchases, the Target RedCard offers other benefits to shoppers. Those benefits cardholders receive include:
Where the RedCard gets complicated is the fact that Target offers it in three different forms. When applying, you can choose either a debit or credit card. The third version, a Target Mastercard that you can use outside Target, isn’t open to new applicants, but some credit card holders may be targeted for it as an upgrade. All versions offer similar benefits at Target.
Unlike most store cards, Target allows you to apply for two separate versions of the RedCard. Customers can choose between a debit card or a credit card. Both offer similar discounts and benefits with no annual fee.
The main advantage of choosing the credit card option is the ability to pay over time. You’ll have 25 days to pay your bill after your statement closes before interest starts to accrue. Watch that date carefully, though: the APR on the Target RedCard is sky-high and will quickly chew through the 5% discount you get for using the card.
This option can also be good for someone looking to build credit. The Target credit card is easier to qualify for than most rewards credit cards, so it could be a solid option if you have fair or limited credit history. Your payment history will be reported to the main credit bureaus, giving you the opportunity to improve your credit score if you responsibly pay your bill.
This card, like many store cards, is known for offering low credit lines at first but raising the credit limit based on your payment history and use of the card. Some cardholders are eventually offered an upgrade to a Target Mastercard, which can be used at stores other than Target.
Like all debit cards, you’ll need to have funds in your checking account to cover the full cost of your purchase. Money is withdrawn immediately. For someone with a habit of spending more than you planned, this can be a good way to ensure you’re not accidentally racking up debt.
Additionally, choosing the debit card is a good option for anyone who wants to avoid opening a new credit card. Since purchases are paid for instantly, that’s one less monthly bill to keep track of. It also means you won’t have another credit inquiry or new account listed on your credit report, which can be helpful if you intend to apply for a car loan or mortgage in the near future.
Keep in mind that debit cards don’t offer the same consumer protections that credit cards do. Debit cards are governed under the Electronic Fund Transfer Act, which protects you against fraudulent charges—but only after you report your debit card lost or stolen. You’re still on the hook for up to $500 in fraudulent transactions if you report the issue more than two business days after your card loss. Wait 60 days, and you’re responsible for all charges with no cap. Learn more in our guide to credit versus debit cards.
The Target RedCard credit and debit cards offer similar store benefits, so knowing how you want to use the card can help you choose the right option. With the debit card, you can pay for Target purchases directly from an existing checking account and withdraw up to $40 in cash when you check out. The Target RedCard Credit Card offers a path to a card upgrade and the ability to earn rewards on other card purchases outside of Target.
All credit cards come with fees, but the credit version of the RedCard has sky-high fees. The APR varies with the market but is currently 29.95% variable APR on purchases. Late fees are up to $41 each, and returned payments can add up to $30 to your next bill. In other words, if you don’t pay your bill, it could snowball out of control before you know it.
You can avoid all these fees by sticking to your budget while you’re in-store and setting up automatic monthly payments.
The RedCard is only designed for use in Target stores or at Target.com. If you hold the debit card or entry-level credit card, your card will be denied if you attempt to use it elsewhere. Save yourself the embarrassment by saving it for Target purchases only.
Some credit cardholders are offered an upgrade to the Target Mastercard after several months of responsible use. The Mastercard version offers the same in-store benefits but can also be used outside of Target. However, just because you can doesn’t mean you should. The Target Mastercard doesn’t offer great rewards or discounts at other stores. You’re better off getting a separate card for other purchases, like the Citi Double Cash® Card, which offers 2% cash back on all purchases—1% when purchases are made and another 1% when they’re paid off or the Blue Cash Preferred® Card from American Express, one of the best credit cards for groceries if you do your grocery shopping at a traditional U.S. supermarket (Terms apply. See rates & fees ).
