Debit cards were in the news frequently this past year – often in a less-than-positive light – as numerous banks sought to impose fees for their use. Normally, a debit card is issued by the bank that holds your checking account, though this is not always the case. The Target REDcard is one such debit account set up via a retailer, rather than a financial institution.
The Target REDcard functions as a debit card that draws funds from any checking account. It offers the same convenience as any debit card, while offering customers additional benefits, such as a 5% discount on most purchases. Below is more information on the top features and how it works.
- Application Can Be Completed In-Store or by Mail. Applicants who apply in-store must provide a voided check. Otherwise, customers can print out and mail in their application.
- Direct Debit Features. Charges at Target are deducted directly from the cardholder’s checking account, regardless of bank or financial institution.
- Discounts at Target. When using a REDcard, Target customers receive a 5% discount on qualifying purchases. This includes most items, with some exceptions including gift cards, prescription drugs, and medical services.
- Free Shipping From Target.com. Cardholders are eligible to receive free shipping for online orders, with no minimum purchase requirement.
- No Annual Fee. There is no fee to use this card, though there are returned payment fees that vary based on the state in which the cardholder resides.
- Donations to Education. Target makes a donation to education equal to 1% of all REDcard purchases.
- Great Discounts. For regular Target shoppers, there are many savings to be realized by deducting 5% from all purchase prices. This is a true, immediate discount taken at the register, not cash back that must be claimed at some later date.
- Free Shipping. Think of this like the paid Amazon Prime service, but free. However, unlike the Amazon program, there is no guarantee of two-day shipping. Online purchases can even be returned at a physical location, so feel free to buy shoes or clothing to try on at home.
- Donations to Education. Target donates 1% of the amount of all REDcard purchases to the K-12 school of your choice.
- Extra Savings on Pharmaceutical Purchases. When you fill at least five prescriptions at a Target pharmacy, you receive an extra 5% discount for one day of Target shopping, in addition to your existing 5%.
- No Potential for Debt. Many people avoid credit cards, including retail store-issued credit cards, after incurring costly debt. Debit cards are a fantastic alternative, as customers can only spend money that they already have in their accounts.
- No Credit Check. No matter your credit history, nearly all applicants with a checking account are approved.
- No Fees. There is no need to worry about monthly fees, annual fees, or charges for going below a minimum balance.
- Does Not Work at Target Mobile. Target has a cutting-edge product that offers discounts at the store and online. However, it does not offer a discount at Target Mobile. However, it would not surprise me to see this functionality added in the future.
- Not Part of a Payment Network. Since it does not belong to a processing network such as Visa or MasterCard, this card can only be used at Target stores and at Target.com.
- Cannot Be Used to Carry a Balance. I personally believe that this is a great feature; however, for those who need to carry a balance from time to time, this card will not be of any use.
- Does Not Build Credit. There is no credit check necessary to receive this card, but use of this card will do nothing to improve your credit score.
Target is an innovative retailer, offering stylish goods at affordable prices. Likewise, its REDcard is a unique product that offers the ability to make purchases directly from a linked checking account. When you consider the significant 5% discounts and free shipping, it becomes clear that this is a worthwhile product. Considering that there are no costs or fees to use this card, it’s an easy choice for any regular Target customer to obtain the REDcard.
Do you have experience with the Target REDcard? What additional advantages or disadvantages can you report?