Target RedCard: A Valuable Discount Card for Target Regulars

The Target RedCard is one of the few store credit cards that might actually be worth the trouble. On top of a regular discount cardholders receive at checkout, the card's range of perks can help save you money. Read our full Target RedCard review to see if it's right for you.

This credit card is a good fit for: Frequent Target shoppers who want a reliable discount on most Target purchases.

Features and benefits

As with any cobranded card, the Target RedCard is made for its brand-loyal customers. The perks are all focused around your Target purchases and include a variety of discounts.

Right on target: 5% discount in stores and online

Instead of earning purchase rewards on your Target purchases, using your Target RedCard gives you a 5% discount on eligible items. The discount is automatic at checkout, both in store and online; all you need to do is use your card to pay.

For example: Suppose you put a $100 Target purchase on your card. You would immediately get a $5 discount on the purchase by using your Target RedCard as the payment method at checkout.

This is way different from how most rewards credit cards work. With typical rewards cards, you'd earn rewards on your purchase, then later redeem those rewards for something like statement credit or gift cards. So, in the previous example, you'd get $5 in rewards to use later instead of the $5 discount at the register.

LEARN MORE: Best rewards credit cards

The straight discount route is arguably better than earning rewards for most people. You don't have to remember to redeem your rewards later, nor do you have to take time out of your life to do so.

Surprisingly useful: Extended return window

This is a perk that I think may be undervalued by many people -- until they need it. Target RedCard cardholders get 30 days added to the regular return window on eligible purchases made with their card.

Normally, Target's policy gives you 90 to return most items. So, Target RedCard members would get a total of 120 days (about four months) to make a return.

Maybe life has been extra busy -- like, say, during an inter-state move -- and you need a few extra weeks to make the time. Maybe the product worked fine for the first few tries, then went kaput right at the 90-day mark (this happens more often than you'd think). Whatever the case, having a little extra time can really save the day when you need it.

The extended return benefit isn't without its own restrictions (of course). It doesn't apply to:

• Target Optical purchases
• Non-returnable items
• Contract mobile phones
• Online purchases of Supplemental Nutrition Assistance Program (SNAP) eligible items using both Electronic Benefits Transfer (EBT) and a Target RedCard for payment

Bland but beneficial: Free shipping for eligible online orders

It's definitely not the marquee benefit, but this one could be useful for the right cardholder (especially folks trying to kick their Amazon Prime habit). Shopping target.com and paying with your Target RedCard grants you free two-day shipping on eligible items, and free standard shipping on most other Target items.

Now, it's worth pointing out that you can get free shipping on most Target items by meeting the $35 minimum. So, you don't need a Target RedCard to save on shipping fees. There's also an argument that free shipping with no minimum makes us more prone to impulse buying.

Either way, it can be a handy little perk for folks who need it.

Nebulous by nature: "Exclusive extras" for Target RedCard holders

So this one is hard to really quantify in any appreciable way. There's no clear data on what it includes. Target itself is pretty vague, saying, "RedCard holders will be offered exclusive extras, including special items and offers (collectively, 'exclusive extras')."

None of the Target RedCard members I asked could quite put their finger on this benefit, either (though it's an admittedly small demographic). One mentioned the occasional email offering early access to a sale. No one reported receiving free items.

Drawbacks to consider

So far as store cards go, the Target RedCard isn't bad. That doesn't mean it's without downsides that need to be taken into account, including the meager welcome bonus, inflated APR, and fine print.

Way off the mark: Sad welcome bonus isn't competitive

I am a big fan of welcome bonuses, and I truly believe every card should have one. But sometimes the bonus is so sad you almost think, "Why bother?"

This is one of those. For new Target RedCard cardholders: Save $50 on a future qualifying purchase over $50 when approved for a credit card.

For comparison, the best welcome bonuses out there can be worth $1,000 or more. Even a standard no annual fee card will usually give you a bonus worth $200. So a $50 bonus is something I don't really look twice at most of the time.

LEARN MORE: Best sign-up bonus credit cards

What makes matters worse? You can only redeem the offer through Target Circle, Target's loyalty program. This means you need to sign up for something else entirely just to use the bonus you get from your credit card. (Granted, most folks who shop Target enough to get the credit card are already members and/or would join anyway. But still.)

Totally off balance: High APR with no intro offer

One thing almost every store card has in common is that the interest rate is going to be terrible -- and the Target RedCard is no exception. The 28.15%, variable APR is higher than most credit cards by a big margin. It doesn't matter what credit score you have, either, as everyone gets the same terrible rate.

Additionally, don't expect any kind of intro APR offer to blunt the sting. You'll be hit with the high APR from day one.

LEARN MORE: Best 0% intro APR cards

All of this is to say you should never, ever, ever carry a balance on a Target RedCard. If you're someone prone to carrying a balance from month to month, look for another card with a lower interest rate.

Asterisk: Discounts and perks have important exclusions

As much as I love the 5% discount -- and I really do, it's great -- don't assume it applies to everything in the store (or online). There's a fairly long list of things that are excluded from the discount:

• Prescriptions, over-the-counter items located behind the pharmacy counter and clinic services at Target
• Target Optical eye exams and protection plans (Target Optical products, such as glasses and contact lenses, do receive the 5% discount)
• Target GiftCards; Visa, Mastercard and American Express prepaid cards; Game On, DraftsKings, and other sports betting gift cards; and Starbucks gift cards purchased at Starbucks locations within Target stores
• Target credit account payments, Target RedCard Reloadable cash reloads, Target Debit Card cash back, and cash advances on the Target Mastercard
• Wireless protection program purchases and deposits required by mobile carrier
• Gift-wrapping services
• Taxes, shipping, delivery, handling, and all other fees or charges

As you can see, most of the things you pick up as you stroll the aisles will be included, but a lot of potentially costly goods and services won't. (The pharmacy exclusion could be particularly painful for some folks.)

Confusing and unnecessary: Target Mastercard has weird rules and bad rewards

Technically, there are two different Target credit cards. There's the regular store card, the Target RedCard (sometimes just called the Target Credit Card). Then there's the Target RedCard Mastercard (or just the Target Mastercard).

LEARN MORE: Best Store Credit Cards

The Target Credit Card is a closed-loop card, meaning you can only use it to make Target purchases (in store and online). However, the Target Mastercard is an open-loop card, so you can actually use it to make purchases anywhere Mastercard is accepted. It also earns rewards on some of those purchases:

• 2% rewards on gas and dining
• 1% rewards for other purchases

Unfortunately, these aren't cash back rewards; you can only use them toward a Target gift card. They're also not very interesting categories, since you can get much higher return from many, many other cards.

Making matters worse, you can't actually apply for the Target RedCard Mastercard. You have to apply for the store card first. Then, later, if you meet some undisclosed standards, you'll be offered an upgrade to the Mastercard version.

My question here, though, is: Why bother?

LEARN MORE: Best Mastercard credit cards

You'll need to have at least fair or average credit -- a credit score over 580 -- to qualify for the Target RedCard. Like any card, you'll have a better chance of being approved if you have good credit or better. Applicants with lower credit scores may also be offered a lower credit limit.

Read more: Best Credit Cards for Fair/Average Credit

In the world of credit card rewards, it's hard to find a card that provides a consistent 5% return on purchases. The Target RedCard's hassle-free 5% discount on your purchases at checkout does just that. You can use the Target RedCard Mastercard for any purpose and receive up to 2% rewards in the form of a Target gift card.

When you throw in the other perks, like free shipping, you have the makings of a very useful store card -- provided you're a regular Target shopper.

Even if you're only an occasional Target shopper, you could get some benefit out of the Target RedCard, though you'd likely be better served with a regular cash back card that can be used anywhere.

See more options: Best Grocery Credit Cards

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.