Is the Target Red Card worth it?

Is the Target RedCard right for you?

Should you apply for a Target RedCard? (AFP via Getty Images)

Most people do not think store credit cards are worth the hassle, with limitations on where you can shop and lacklustre benefits, yet the Target RedCard may just be the one to break the mould.

With discounts, free shipping and an extended returns policy, the RedCard makes the Target shopping experience that much more seamless.

There is even an opportunity to be upgraded to their Mastercard, which allows you to use it outside of Target and earn store rewards at the same time.

However, the RedCard may not be ideal for everyone, as only avid Target shoppers may feel the benefits and a steep APR rating may offset any discounts you get.

Here’s everything you need to know to see if the Target RedCard is right for you:

Does Target have different cards?

There are four versions of the Target RedCard – Debit Cards, Credit Cards and a Reloadable card.

All cards give you five per cent off your purchases at Target in-store and online, access to exclusive items and offers and free and fast shipping.

The time you can return your items is also extended an extra 30 days on top of the standard policy.

Apart from those benefits, here’s what each card has to offer exclusively:

Target Credit Card – No other benefits

Target Mastercard – With a credit RedCard, you can earn two per cent on dining and gas purchases at selected outlets, one per cent everywhere else outside of Target, also at selected outlets

Target Debit Card – Pay for your purchases directly from your existing checking bank account and withdraw up to $40 in cash at checkout.

Reloadable Card – Add cash to your card for free at Target and spend anywhere a Visa debit card is accepted and withdraw up to $40 in cash at Target checkouts.

How do I get a RedCard?

You can apply for a Credit and Debit card on the Target website.

A Reloadable card does not need to be applied for, but can just be opened on the website.

To get a Target Mastercard, you need to open up a Credit card first and wait for it to be offered as an upgrade.

Can I spend my RedCard anywhere?

The Target Mastercard can be used anywhere and the Reloadable card can be used anywhere that accepts Visa debit.

Both the Target Credit and Debit card are “closed-loop” so you cannot use it outside Target in-store and online.

How does the Target Mastercard Rewards card work?

If you opt to open a credit RedCard, then you can earn rewards based on your purchases almost anywhere you buy gas, go out for dinner or any other activity.

When you make a purchase at a gas station or out dining, you can earn two per cent in ‘rewards.’

The same goes for almost everywhere else outside of Targert, where you will receive one per cent in rewards.

These rewards get turned into an amount of money on your RedCard account that you can turn into a gift card or e-gift card to spend in Target.

Yo need to have at least $10 in rewards to turn it into a gift card, but there is no limit on the amount of rewards you can earn.

What other benefits are there?

Every RedCard gives you a five per cent discount on purchases made at Target and any Starbucks located in-store.

However, if you use a RedCard in the same transaction with another form of payment, the discount will be taken only off the purchase amount tendered to your RedCard.

The discount is not compatible with any other discounts or if you are using a Target gift card.

The discount does also not apply to: prescriptions or over-the-counter items at the store’s pharmacy, Target eye exams or protection plans, credit account payments, Shipt membership fees, wireless protection program, gift wrapping services, taxes, shipping, delivery, handling and all other fees and charges and alcohol bought in Indiana.

While it does not apply to this list, it is applicable to thousands of items sold at Target.

The RedCard also gives you extra time to return times, gifting you 30 additional days on top of the standard return policy to decide if you want to keep your item.

RedCard holders are also treated to exclusive extras. This could be either special items or offers only to members, which vary throughout the year depending on the occasion.

Tired of having to pay a hefting shipping fee on top of your shopping cart total, RedCard users get shipping for free across all 50 states and Puerto Rico.

If that is not all, thousands of items are eligible for the RedCard’s two-day shipping policy, meaning if you are in a rush to grab your hands on a new product or need a gift in a hurry, Target will deliver your product within two days.

Does it save or cost you money?

There are no fees to set up any of the cards.

Based on Target’s own calculations, the RedCard’s five per cent discount could save you up to $675 per year on groceries and nearly $500 on items needed for the first year a baby is born.

However, the money saved on discounts may not amount to much due to the credit RedCard’s high APR variable of 29.95 per cent on purchases.

It is common for store credit cards to charge higher interest than traditional credit cards, so only an avid shopper at Target may feel the benefits.

What is the limit?

The limit for the Credit card is not displayed on Target’s website, but credit card compare websites have reported the limit generally ranges from $200 to $2,500 or more.

The maximum balance for a Reloadable card is $250,000 per account.