The Target Prepaid REDcard® from American Express, part of the Serve card family, is a reloadable prepaid debit card with absolutely no load fees or recurring fees and a generous rewards program that automatically and instantaneously knocks 5% off users’ in-store and online Target purchases.
Since it’s backed by American Express, this card is accepted by every merchant that accepts American Express, though the 5% purchase discount is limited to the Target universe. It also has an online bill-pay feature that allows users to pay rent, utilities, and other recurring obligations, replicating a key capability of traditional bank accounts.
The Target Prepaid REDcard from American Express shares its name and likeness with some other Target-branded cards, including the Target REDcard Credit Card (a store credit card), the Target REDcard MasterCard (a more traditional credit card accepted by MasterCard merchants worldwide), and the Target REDcard Debit Card (a non-reloadable debit card linked to users’ bank accounts).
Unlike the REDcard Credit Card and Mastercard, the Prepaid REDcard doesn’t allow users to carry balances from month to month. Nor does it help users build credit with timely payments and responsible usage. Unlike the REDcard Debit Card, users are limited by the balance that they actually load (and subsequently reload) to the card, not the balance in their connected bank accounts.
Load and Reload Options
Before you can use your Prepaid REDcard for the first time, you need to load it with funds. Subsequently, when you’ve depleted your loaded cash and your card balance approaches $0, you need to reload it if you want to keep using it.
There are several acceptable methods for loading and reloading your card:
- Cash Loads: First, you can load cash at Target stores by handing the cashier the amount you want to deposit – as little as $0.01, and as much as $1,000 per deposit. Oddly, you can only load once with cash at Target stores in Arkansas and North Carolina – you can’t do cash reloads in those states, only direct deposit or debit card reloads.
- Direct Deposit: Second, you can load and reload via direct deposit, so that your paycheck or government benefits are ready to use as soon as your employer or government agency releases them.
- External Debit Card: Third, you can link an external debit card and transfer funds directly from that card’s bank account to your Prepaid REDcard account and fund your REDcard at will. If you enable “back-up funding,” Amex automatically transfers funds from your linked debit card (if present) to cover transactions for which you do not have sufficient funds in your Prepaid REDcard account.
- Bank Account (Not Available for New Cards): Finally, if your account was opened prior to October 28, 2015, you can directly link a bank account (without the debit card).
Regardless of method, there are no fees for loading and reloading your Prepaid REDcard. In any calendar year, you can’t deposit more than $100,000 total into your Prepaid REDcard account.
This card has no fees. There are no load or reload fees, monthly or annual fees, overdraft fees, minimum balance fees, ATM fees for cash withdrawals, foreign transaction fees, or fees to send and receive money online. Apparently, brand loyalty is enough for Target and Amex.
Discount Rewards Program
The Target Prepaid REDcard from American Express confers automatic, immediate 5% discounts on most spending at physical Target locations and at Target.com.
The headline 5% discount rate is subject to some important restrictions and limitations, however. Key transaction types that do not qualify for any discount at all include:
- Spending at restaurants inside Target, such as Freshii and Starbucks
- Target Optical eye exams
- Target Pharmacy prescriptions
- Online and in-store purchases of gift cards and prepaid cards
- Purchases of gift wrap
- Purchases of wireless protection program plans
- Deposits required by wireless carriers that sell within Target stores or at Target.com
Beyond these categories, you can earn unlimited 5% discounts in the course of a given month or year, subject to the $100,000 maximum annual deposit cap. However, split-payment transactions that divide payment between your REDcard debit card and cash or another card only earn discounts on the portion paid with your REDcard.
Transactions made at non-Target vendors do not qualify for the 5% discount under any circumstances.
This card confers fee-free cash withdrawal privileges at ATMs located inside Target stores, as well as approximately 43,000 Allpoint ATMs located throughout the United States. However, ATM withdrawals at non-Target, non-Allpoint ATMs are not permitted. Also, there is a very specific geographic restriction on ATM usage: ATMs at Target stores in Kansas City, Missouri, do not work with this card.
Free Standard Shipping
When you pay for Target.com orders with your REDcard, you get free standard shipping, as long as your shipping address is in the United States, Puerto Rico, or the APO/FPO system. If you upgrade to expedited shipping, you still incur shipping fees.
Extended Return Privileges
REDcard users have 30 extra days to return purchased items after the standard return window expires. Certain types of purchases are exempt, including Target Mobile purchases, nonreturnable items, and items with a fixed return date.
American Express Benefits
This card comes with a nice lineup of American Express-backed perks, including:
- 24/7 global assistance hotline
- 24/7 roadside assistance for certain travelers
- Purchase protection that provides reimbursement for accidental damage and theft for up to 90 days from purchase
Prepaid REDcard cardholders can set up sub-accounts within their REDcard accounts at no additional charge. These are similar to consumer credit cards’ authorized user accounts or business credit cards‘ employee cards, and come with customizable spending limits, as the primary accountholder can control loading and reloading activity.
The Prepaid REDcard has a built-in saving feature, known as “Reserve,” that’s free to use. Reserve lets you wall off a customizable amount of “untouchable” funds that remain in your prepaid card account, but can’t be used to fund everyday purchases. Reserve is useful for building an emergency fund or saving up for a big-ticket purchase.
- No Monthly Fee. The Prepaid REDcard has no monthly fee, meaning there’s no recurring cost to use this card. That’s great news for Target lovers who wish to maximize the value of its discount.
- No Load or Reload Fees. No matter how you choose to load or reload your Prepaid REDcard, you’re not liable for load or reload fees. Most competing prepaid cards, including those marketed by Green Dot and Kaiku, charge load and reload fees in some or all cases. That significantly raises their cost for frugal consumers.
- Deep, Instantaneous Discount on Target Purchases. This card’s signature benefit is the instant 5% discount on most in-store and online Target purchases. Basically, for every $100 you spend at Target, you get $5 back. Few other rewards cards, including the top cash back credit cards on the market, offer such generous returns on spending.
- Lots of Fee-Free ATMs. The Prepaid REDcard offers fee-free access to ATMs in virtually all Target locations and approximately 43,000 Allpoint ATMs around the country. Wherever you are, chances are you’re not too far from a place to tap your Prepaid REDcard for fee-free cash.
- Nice Fringe Benefits for Frequent Target Customers. The Prepaid REDcard has 2 great benefits for frequent Target customers. The first is free standard shipping on online orders paid for with the card – a potentially valuable break for folks who buy bulky or heavy Target items online. The second is a 30-day extended return period on most Target purchases – a great benefit for careful consumers who want to try before they buy.
- Healthy Lineup of Amex-Backed Benefits. This card’s Amex-backed benefits are better than those of the average prepaid debit card. They include 90-day purchase protection, roadside assistance for stranded drivers, and 24/7 global assistance for travelers around the world.
- Can’t Build Credit. One of the key drawbacks of the Prepaid REDcard is its inability to build your credit history or improve your credit score. If you’re recovering from a major financial setback, such as bankruptcy or foreclosure, this card won’t give you a leg up. Instead, you’ll need to look to a secured credit card – but, since there’s no secured REDcard, it won’t earn you awesome discounts at Target.
- Some Frustrating Coverage and Functionality Gaps. This card has some relatively minor, but nonetheless frustrating, geographical gaps. Notably, you can’t reload with cash at Target stores in Arkansas and North Carolina – a major problem if you can’t or don’t want to arrange direct deposit to and from your Prepaid REDcard account. You also can’t use ATMs at Target stores in Kansas City, Missouri. Few other prepaid card issuers have such restrictions.
- No ATM Access at Non-Target, Non-Allpoint Locations. It’s one thing to charge fees for access to out-of-network ATMs. It’s quite another to bar access entirely. You can’t use your Prepaid REDcard at non-Target, non-Allpoint ATMs, so if you find yourself far from both, you can’t draw on your account’s available cash.
There’s a rich and growing world of choice available to reloadable prepaid card users. Consumers who want the benefits of bank accounts and debit cards without the hassle of either are embracing the prepaid movement. As initiatives like the Visa Prepaid Challenge make clear, it’s entirely possible to exclusively budget with – and live on – reloadable cards.
Even amid stiff competition, the Target Prepaid REDcard® from American Express stands out from the prepaid crowd. A few blemishes aside, the Prepaid REDcard is an awesome product that combines many of the best features of traditional debit and credit cards. If you’re a frequent Target shopper seeking a new way to pay for (and save on) your favorite things, it’s nearly irresistible.