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Target REDcard: 5% Discount in Store and Online

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Target REDcard: 5% Discount in Store and Online
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With more than 1,800 stores in the United States, Target is one of the largest retailers around. For everyday purchases like clothes, home goods and food, Target is one-stop shopping without a membership fee. What could be better?

How about 5% off just about everything all the time?

That’s the benefit when you use the Target REDcard. You get 5% off all your shopping at Target and Target.com and free shipping on most Target.com purchases. Plus, the card adds 30 extra days for returns; Target regularly allows 90 days for returns.

REDcard basics

Target uses the name “REDcard” to refer to three different products:

  • Target credit card: This is a store card, accepted at Target and Target.com. There is no annual fee, but as with most store cards, the interest rate is on the high side: 23.15%, as of November 2016.
  • Target debit card: This card is linked to your checking account, and your purchases are deducted each time you use the card. It’s accepted at Target and Target.com. There’s no annual fee.
  • Target MasterCard. This is accepted anywhere that takes MasterCard. However, new cardholders cannot apply for the Target MasterCard. It’s an upgrade that Target may offer you later. It has no annual fee or foreign transaction fee, and the annual percentage rate is the same as on the Target credit card.

All three cards give you the same benefits outlined above: 5% off, free shipping, extra time for returns. The MasterCard doesn’t give you any rewards outside of what you spend at Target. All are chip-and-PIN cards, meaning you need to enter your PIN each time you use it. This isn’t a bad thing, because such cards are more secure than chip-and-signature cards.

5% exclusions

The 5% discount applies to most of the shopping you’ll do at Target except for these things, according to the Target REDcard website:

  • Prescriptions, over-the-counter items located behind the pharmacy counter and clinic services at Target.
  • Target Optical eye exams.
  • Target gift cards and prepaid cards, and Stockpile and Gift of College gift cards.
  • Previous purchases.
  • Certain restaurants in Target stores, such as D’Amico & Sons Italian Kitchen, Freshii and Pret A Manger.
  • Target credit account payments, Target debit card cash back, and cash advances on the Target MasterCard.
  • Gift wrap and shipping and handling charges on Target.com purchases.
  • Wireless protection program purchases and deposits required by a mobile carrier.
  • Where otherwise prohibited by law.

Cartwheel for more bonuses

You can score more discounts when you use Target’s Cartwheel app. Available on iOS and Android, Cartwheel offers discounts of 5% to 50%, or specific dollar amounts, on items throughout the store. Before you shop, check Cartwheel to see what offers are available and choose the ones you need. You can also scan bar codes while you shop and add offers that way. At checkout, the app produces a bar code that can be scanned, giving you your extra discount. When you use a REDcard with Cartwheel, your 5% REDcard discount is applied to the total after all Cartwheel discounts have been subtracted.

Should you get the Target REDcard?

If you shop at Target often, the REDcard is a must have. The 5% discount by itself is a great deal, not to mention the free shipping for online purchases and the additional savings through Cartwheel.

The only downside is the high interest rate on the Target credit card. Pay your balance in full each month so interest charges don’t gobble up your savings. Better yet, choose the Target debit card and never pay a penny in interest. Just be sure to stick to your budget.

» MORE: NerdWallet’s best store credit cards

Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email: ecannon@nerdwallet.com. Twitter: @ellencannon.