Debit cards: they’re not just for banks anymore.
The Target REDcard Debit Card is a great example of a debit card that doesn’t require users to throw in their lot with any particular bank. As long as you have an account with an FDIC-insured, U.S.-based bank, you can set up your REDcard Debit Card to draw funds directly from that account to cover purchases made at Target stores and Target.com.
With 5% off on most online and in-store Target purchases and free two-day shipping on most Target.com purchases, the Target REDcard Debit Card is a potentially lucrative spending aid for frequent Target shoppers. It has some other benefits that bear mention, too – so let’s take a closer look at this card’s features, advantages, drawbacks, and overall suitability.
Discounts at Target
The Target REDcard Debit Card automatically discounts most Target purchases by 5% at the point of sale – online or at the register – subject to certain important restrictions and limitations. Transaction types that may not qualify for the 5% discount include:
- Spending at restaurants inside Target, with the important exception of in-store Starbucks locations
- Eye exams and other services at Target Optical
- Prescriptions, clinic services, and non-prescription items stored behind the counter at Target pharmacies
- Gift wrap purchases
- Wireless protection program payments and deposits
Outside these restricted categories, the 5% discount is functionally unlimited. Bear in mind that split payments only earn the discount on the portion applied to your REDcard. For instance, if you split a $100 order 50/50 between your REDcard and a cash back credit card, your discount will be $2.50 – 5% of $50.
Remember: REDcard doesn’t work at non-Target vendors.
The Target REDcard Debit Card’s other noteworthy benefits include.
- Free Standard 2-Day Shipping: When you pay for orders from Target.com with your REDcard, you get free standard 2-day shipping to the United States (including Puerto Rico and APO/FPO addresses). Expedited shipping is subject to shipping fees.
- Extended Return Windows: On most merchandise, you’ll have 30 extra days to return purchased items after the regular return window expires. Key exclusions include all-sales-final items, Target Mobile purchases, and items with pre-determined return dates.
- Target Subscription Savings: You’ll get another 5% off (10% off in total, including the REDcard discount) when you subscribe to receive select essentials on a recurring basis.
- Clearance and Top Deals Savings: Clearance-marked items and weekly Top Deals items are also subject to a bonus 5% off.
- Specialty Gift Cards: Specialty gift cards not excluded from the 5% REDcard discount earn bonus 5% off, for a total discount of 10%. If you’re not sure which gift cards qualify, check the fine print at Target.com or ask a sales associate in-store.
- Cartwheel: Cartwheel purchases qualify for up to 50% savings, plus the standard 5% REDcard discount.
This card has no annual fees or monthly maintenance fees. Check your cardholder agreement for less common fees and restrictions.
- Expansive 5% Discount. Setting aside the important exceptions noted above and reiterated below, the Target REDcard Debit Card promises 5% off most in-store and Target.com purchases. That’s better than the average rate of return on all but the most generous rewards credit cards.
- Free Two-day Shipping on Target.com Purchases. REDcard users qualify for free two-day shipping on Target.com purchases, subject to certain exceptions and restrictions. Expedited shipping still incurs a fee.
- Extended Returns on Most Items. REDcard users also qualify for extended return windows on most Target purchases – 30 days more to decide whether they really need something.
- Opportunities to Earn 5% Bonus Savings on Select Transactions. Select types of REDcard spending earn 5% bonus savings, for a total savings of 10% off sticker price. This includes clearance-marked items, Top Deals items, subscription products, and specialty gift cards.
- No Interest Charges or Long-term Debt. This is not a standard credit card. It’s not a retail store-issued credit card. It’s not a personal loan or line of credit. In fact, it’s not a credit product at all, which means no exposure to interest charges or risk of long-term debt.
- No Credit Check Required. As long as you have a valid checking account and can prove your identity, you’re likely to qualify for a REDcard Debit Card. There’s no credit check required.
- No Regular Fees. This card doesn’t have an annual fee or monthly maintenance fee. As long as you use the card as intended and keep your linked bank account open, you’re unlikely to ever incur a fee with use.
- Seamless Application. It’s super-easy to apply for the Target REDcard Debit Card. You can apply in-store at checkout or online at your convenience – you’ll just need to provide your bank account details and some basic demographic information to get started.
- Important Exceptions to the 5% Discount Rule. The 5% REDcard discount isn’t quite universal. Notable exceptions include restaurants (except Starbucks) inside Target stores, prescriptions and clinic services at Target pharmacies, Target gift cards and prepaid cards, and gift wrap.
- Doesn’t Work Outside Target. The Target REDcard Debit Card isn’t part of a payment processing network such as Visa or Mastercard, so it’s only eligible for use at Target stores and at Target.com. This is a major drawback for applicants hoping to replace their bank-issued debit card entirely.
- No Way to Carry a Balance from Month to Month. While it’s best to pay off credit card balances in full by your statement due date, carrying a balance is sometimes unavoidable or (in rarer cases) even advisable. You can’t do that with this debit card. If you qualify, the Target REDcard Credit Card does allow carried balances.
- Doesn’t Build Credit. On the bright side, you don’t need to submit to a credit check (which can temporarily depress your credit score) when you apply for this card. On the other hand, this card won’t build your credit or improve your credit score.
Target doesn’t have a monopoly on non-bank debit cards. Reloadable prepaid debit cards are taking the country by storm, offering low fees, flexible load options, and sensible budgeting tools for consumers who’d rather not deal with traditional bank accounts. Most belong to major payment networks like Visa, Mastercard, and American Express, so their use isn’t restricted to a single retail ecosystem a la the REDcard Debit Card.
Of course, reloadable prepaid debit cards can’t compete with the REDcard Debit Card on the most important metric of all: card rewards, or store discounts in this case. If you’re a frequent Target customer looking to trim your monthly shopping bill, it’s hard to argue with 5% off (nearly) across the board.
Do you have a Target REDcard Debit Card? Are you thinking about applying for one next time you’re at your local Target store?