How the Target Credit Card Works

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How the Target Credit Card Works

The Target credit card, sometimes known as the RedCard, is a credit card that may be used at Target stores and on the company’s website. The Target RedCard provides a 5% discount on Target purchases, no annual fee, and an additional 30 days for returns and exchanges.

The Target credit card, on the other hand, has an interest rate or annual percentage rate (APR) of more than 20%. 1 As a consequence, if you have a habit of carrying large amounts on your credit cards for many months, the interest rates may cancel out any savings from the reduction.

While Target provides a 5% discount on purchases, some credit cards provide cash back, which is when the credit card issuer pays the cardholder a proportion of the amount spent on purchases. Please use this guidance before applying to help you decide if the Target RedCard is ideal for you or whether other cards with rewards or cash-back features are a better match for your shopping habits.

Key Takeaways

  • The Target RedCard is offered in three forms: store charge card, Target Mastercard, and debit card.
  • The Target RedCard offers a 5% discount on Target purchases, no annual fee, and an additional 30 days for returns and exchanges.
  • However, the Target RedCard’s high interest rate may cancel out any savings from the discount.
  • The Target credit card is great for folks who shop at Target regularly.
  • A regular rewards credit card may be a better alternative for people who usually purchase elsewhere.

How the Target Credit Card Works

The Target RedCard is available in many varieties, including a Target credit card (a store charge card) and a Target Mastercard (a traditional credit card).Target also has a debit card that deducts money from your checking account automatically. Each card offers comparable benefits. 23

Retailers such as Target frequently collaborate with a financial institution to provide a branded credit card on which the retailer and bank participate in the customer’s interest and fees. TD Bank USA, N.A., one of the major banks in the United States and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, issues Target credit cards. 4

The Target RedCard charge card is accepted in Target retail stores as well as on Target’s website. The RedCard with the Mastercard logo is accepted anywhere. Sign-up bonuses are usually available for customers who have just been authorized for a new RedCard. 2

Store charge cards may be issued as “private label” or “closed-loop” cards, as opposed to general-use credit cards with the Visa or Mastercard brand. Store charge cards can only be used at the store’s retail locations and on the online, while Visa and Mastercard cards may be used at any retailer.

Rewards and Benefits

Card incentives, points, or cash back from purchases are not available with the Target RedCard. Instead, every time you use the card in a Target store or on their website, you will get a 5% discount. 2 Although it may seem to be a lesser incentive than accumulating points for cash value with other cards, the 5% discount enables consumers to collect their benefits immediately away at a reduced price.

Other benefits of the Target RedCard include:

  • No annual fee
  • Many goods are eligible for free two-day shipping, however delivery dates may be delayed owing to current supply chain issues.
  • Returns and exchanges have an additional 30 days.
  • Unique deals on special products, presents, and more
  • Various sign-up incentives that change from month to month but usually entail money off a first purchase or discounts on certain categories of items. The most recent deals may be found on the Target website. 2

Prescription medicines are not discounted, but there is a separate program via Target’s pharmacy that may assist cut the price of them. 56

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As of July 2022, the Target credit card has an interest rate of 23.65%, however cash advances have a rate of 26.65%. 7

How to Get a Target Credit Card

By completing a credit application, new candidates may apply for the Target RedCard. Target’s website has a mail-in application that demands identity and financial information, such as your driver’s license number, Social Security number, and yearly gross income. 8 You may also apply and submit an application online using Target’s online form.

Required Credit Score

Target’s website does not provide particular credit information regarding how TD Bank processes credit applications. When opposed to standard credit cards, shop charge cards often have more flexible credit and income restrictions. However, if you have bad credit, the credit limit on a charge card may be smaller since it helps the bank that issued the card lessen the risk of financial loss.

Although credit score ranges may not be publicized, a consumer’s credit history must be fair to good in order to be authorized for a charge card. A credit score is a numerical indication of an individual’s ability to manage debt and make timely loan and credit card payments. The length of a person’s credit history, the number of times they have made late payments, and the quantity of outstanding debt all have an influence on their credit score. 9

The credit score of a person typically impacts whether they are authorized for a charge card and the interest rate levied on outstanding accounts. Although Target does not specify the credit score required, a person would ordinarily need a credit score of at least 600 to be authorized for a charge card or credit card—though businesses have issued cards for customers with lower scores. If your credit score is less than 600, you will almost certainly be charged a higher interest rate and have a reduced credit limit if you are accepted. 10

How to Manage a Target Credit Card

In everyday usage, a Target RedCard functions similarly to other credit cards. You may use your Target Mastercard anyplace that Mastercard is accepted. Other varieties of RedCard are exclusively accepted at Target stores. This will display on your card when you make a transaction. You may then pay for the card in a variety of methods, including online.

How to Make a Payment on the Target RedCard

There are four methods to pay with your Target RedCard:

  1. Go to, select “Manage My RedCard,” input your Target RedCard login information, and when the Manage My RedCard screen displays, click “Schedule a Payment” under the Payment Information tab on the left side of your screen.
  2. By phone (800-659-2396)
  3. In-store
  4. By mail11

You may use whatever option works best for you—there is no fee for using any of these ways to pay your amount. Just make sure you pay on time otherwise the hefty APR on the RedCard will cost you a lot of money in interest.

Where Can the Target Credit Card Be Used?

Target RedCard and debit cards are private-label or closed-loop cards, which means they can only be used in Target stores and on Target’s website. The Target Mastercard, on the other hand, may be used at any merchant that takes Mastercard. If you want to use the card at other retailers, please keep in mind that the 5% discount only applies to Target and its internet transactions. 6

The Target RedCard is available as a retail charge card or as a credit card with the Mastercard logo. The 5% discount applies to both cards, but only to Target purchases. As a consequence, if you make the majority of your transactions outside of Target, you may miss out on discounts from other credit card companies.

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Terms and Conditions of the Target RedCard

There is no reduced introductory interest rate on the Target RedCard. The APR of 23.65% on the card is hefty but typical for most shop cards. It will vary depending on the prime rate since Target calculates the card’s APR by adding a percentage to the prime rate. 7

You have 25 days following the end of your billing cycle to pay off all costs and avoid interest. If any amount owing is not paid by the payment due date, a late payment charge of up to $41 will be imposed. In other words, there is no grace period but no penalty APR or yearly cost. If you make a payment, such as a written check, and it does not clear the bank, you will be charged a $30 returned payment fee. 1

Balance transfers from other cards are not permitted with this card. So, if you’re searching for a card that lets you earn points on any transaction, this isn’t the card for you. In reality, there are other fantastic cash-back cards with significantly better APRs available right now.

When applying for a Target RedCard, you must give financial and personal information such as:

  • Name and address
  • Email address and phone number
  • Date of birth
  • Social Security number
  • Driver’s license or state identification number
  • Annual gross income is your income before taxes are deducted from it.
  • If you apply online via Target’s website, you will be asked to generate a PIN that will be used to approve transactions in the store. 812

When you complete and submit the application, it is transmitted to TD Bank USA, N.A. and Target Corporation. 13

Who Should Consider the Target Credit Card

With its 5% discount on purchases at Target stores and online, the Target RedCard may give significant savings, especially if you do a lot of your shopping at Target. If you have a family or children, the cost of goods such as paper towels, cleaning supplies, and food may quickly mount up to hundreds of dollars every year.

Spending $1,000 to $1,500 per month on supplies, for example, would build up to $12,000 to $18,000 per year. A 5% discount on all of those products would result in yearly savings of $600 to $900 (.05 * $12,000 or.05 * $18,000).

Customers who buy the majority of their products at other retailers may be better suited with a typical credit card that gives points and special discounts based on the customer’s purchasing habits. Companies that work with banks to provide branded credit cards offer two sorts of credit cards: travel cards that link with airlines and gas rewards.

Alternatives to the Target Credit Card

You may apply for either a store charge card or a regular Mastercard credit card from Target, depending on your requirements. Traditional Mastercard credit cards function anyplace Mastercard is accepted, which is why they are referred to as open-loop cards.

Other Types of Reward Cards

If you want to earn cash back, points, or discounts on other merchant transactions, an open-loop card may be a better option. In contrast to a shop charge card, rewards cards are often open-loop cards that may be used anywhere. Cash back, airline miles, and hotel points are all possible benefits. There are also cash-back credit cards, which pay a percentage of the amount spent on the card.

Which card is best for you is mostly determined by the sorts of purchases you’ll make and the advantages you’d want to obtain from the credit card company. There are travel cards, for example, that are expressly intended to provide travel points or discounts on airline and hotels, enabling your transactions to accumulate points over time. If you travel a lot of miles, a card with petrol points may be the ideal option for you, since several oil companies and banks offer gas credit cards intended to minimize the cost of fuelling your vehicle.

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Credit Cards Offered by Target’s Competitors

Before you apply, search about and compare the numerous credit cards given by companies that compete with Target to see if you can find a better deal. The Sam’s Club Mastercard, Costco Visa, and Amazon Prime Rewards Visa card are among Target’s rivals. Each of these cards has advantages and disadvantages.

Is the Target RedCard a Credit Card?

The Target RedCard is available in a variety of formats. The Target RedCard charge card is only valid at Target stores and on the Target website. The Target Mastercard credit card is accepted at any merchant, shop, or online. The 5% discount, however, is only available for purchases made at Target stores and on the company’s website. The Target RedCard is also available as a debit card, which differs from a credit card in that transactions are deducted from the associated checking account at your bank.

What Credit Score Is Needed for a Target RedCard?

Target does not specify the minimum credit score required for approval of a Target credit card. Some banks allow store cards for those with a reasonable credit history or a credit score slightly higher than 600. Some banks, however, issue credit cards for people with credit scores in the 500s. If your credit score is poor, you may still be authorized, but you may be charged a higher interest rate on debt and given a lesser credit limit than people with better credit scores. 10

What Do I Need to Apply for a Target Credit Card?

When applying for a credit card at Target, you’ll need to give the following information:

  • Your Social Security number
  • Name
  • Address
  • Date of birth
  • Driver’s license number
  • State ID number
  • Your yearly gross income, which is your total income for the year before taxes are subtracted.

Can a Target Credit Card Help Build Credit?

The Target RedCard may be used as a credit card or a debit card. User payments for the credit card version are reported to the main credit agencies. This may be used to establish credit if payments are made on time. 914

The Bottom Line

The Target RedCard gives customers the option of a charge card that can only be used at Target or a credit card with the Mastercard logo that can be used everywhere Mastercard is accepted. The 5% discount is simple and applies to all purchases, but only at Target. There are no rewards points to keep track of, and if someone buys a lot of things from Target on a regular basis, the discounts may pile up over time.

However, like with other store-branded cards, the interest rate is hefty. Please keep in mind that if the amount is not paid in full each month, the APR on the Target RedCard, as well as the subsequent interest costs, may cancel out the savings from the discount. However, with its 5% discount and no annual charge, the Target RedCard might be an excellent alternative for consumers who buy a lot from Target and are likely to pay off the amounts fast.

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