How Does the Target RedCard Work?

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I was hurriedly going through the checkout lane at Target picking up some items on my way home from work when the cashier sprung a question I’ve heard a zillion times:

“Are you going to be saving 5% with your REDcard today?”

I shook my head, “No,” after which she asked me if I knew about the REDcard. I quipped at her my understanding of it being a Target Visa card that saves me 5% on my purchases. I told her that I didn’t like to use credit cards, but thanked her for the offer. I was surprised when she corrected me by stating there was a Visa REDcard credit card, but there was actually a debit card version that I could link to my existing checking account.

I politely declined again, but left the store thinking I needed to check into it further.

When I got home, I searched the internet and found the following information about the Target REDcard Debit Card:

  • Connects To Existing Checking Account: As the cashier had stated, I could connect a Target REDcard to my existing checking account.   Each purchase made at Target with the REDcard, the amount is deducted directly from the linked checking account.
  • Discount At Target : Each purchase made at Target is discounted 5% when the method of payment is the REDcard.
  • Free Shipping: Purchases made online at Target.com with the REDcard will not incur any shipping charges. Customers can have an item shipped to the store for free even without a REDcard, but it’s much more convenient to have it shipped right to your doorstep.
  • Return Policy: Purchases made with the REDcard allows for an extra 30 days to be returned if you’re not happy with the purchase.
  • No Fees: There are no fees of any kind imposed by Target to have and use a REDcard.

After reading the benefits of having a REDcard, I started searching for negative reviews regarding the card and found the following:

  • Can Only Be Used At Target: Because the card is not associated with a processing network such as Visa or Mastercard, it can only be used at Target.
  • Transaction Speed: Many REDcard users state that transactions did not post immediately. Sometimes it took a few days for purchases to post to the account. This shouldn’t be a problem for me, since I reconcile my checking account almost on a daily basis.

Here are some additional observations of my own:

  • Target is doing this simply to attract people to come through their doors. The REDcard is essentially just a creative way to give customers a never expiring 5% off coupon along with a few other minor perks. It isn’t a huge discount, but every little bit helps, and it helps to build a loyal customer base.
  • I do the majority of my shopping at other retailers where products are generally cheaper. However I do shop at Target for a handful of products that are not carried at my primary shopping outlet. As with my Costco membership, if I decide to go ahead and get attach a REDcard to my checking account I need to make sure I don’t shop there just to get a 5% discount. If a product costs 10% more at Target than somewhere else, but I buy it at Target at a 5% discount, I’m still paying MORE for that item.

I had known about the Target REDcard for years, after all, the cashiers mention it literally every time I shop at Target. However, I misunderstood the details, not understanding that I didn’t have to get a credit card to save 5%.

While 5% isn’t a huge discount, I don’t see any downsides to getting one.

Did you know that you could link a Target REDcard debit card to your existing checking account? If you already have one, what is your experience in using it?

About Travis

73 Responses to “How Does the Target RedCard Work?”

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  1. I don’t live very close to a Target, but I think that sounds awesome. Getting a 5% discount in debit card purchases is like earning credit card rewards without the risk. As long as you don’t mind shopping at Target, of course!

    • Travis says:

      I don’t mind shopping at Target….as long as it’s a product that I can’t get cheaper somewhere else. It’s also literally a block from where I work, so it’s very convenient to stop at on my way to and from work. Sounds like the no shipping perk would be something for you to consider!

  2. I think that sounds great, Travis! You are a living experiment. If you go ahead and start using this card, it will be very interesting to see if you find it difficult to resist the temptation to buy more at Target than you should (given what you need and what the prices are elsewhere) because of the discount and rewards. My prediction is that you won’t. I think that your problem with credit cards was not irresistible points and rewards, it was irresistible license to purchase now and pay later – creating debt. I’ll be following this with interest!

    • Travis says:

      I think you’re right, Prudence. This will be just like using my debit card, only 5% off. It may be worth a followup post after I’ve had it awhile. 🙂

  3. This is news to me. I only thought the REDcard was a credit card. I didn’t know there was a debit card version. While I occasionally shop at Target, I don’t enough to warrant the REDcard. Maybe if the debit card could be used elsewhere in addition to Target, I might get it.

    • Travis says:

      I figure the threshold is pretty low for using it, Jon. Even if I use it very rarely, it can sit in the back pocket of my wallet, only to be brought out when I do buy something at Target. There’s no fees, so I figure, why not? Thanks for sharing your thoughts!

  4. Thanks for doing the leg-work for us! Everything literally sounds great about the REDcard debit card. However, it makes me nervous with the data breach that effected them not to long ago…

    I shop at Target for things anyway, so I would enjoy saving an extra 5% on top of everything else.

    • Travis says:

      My wife said the same thing, Brandy….but I figure after the data breach and the actions they took because of it they probably have the most secure financial network on the planet. Plus, I check our checking account online every day. As soon as something odd showed up I’d call my bank and cancel my debit card. As per their account policies, i wouldn’t be responsible at that point. It’s always good to be wary of your account info though….thanks for reading!

  5. I had no idea. Nice find. 5% is 5%. Sounds like Target is cutting out the middle man too.

  6. Holly S says:

    I love Target but also wasn’t interested in adding a credit card so I was thrilled to find out I could get a debit card with them that offered all the benefits of their credit card. I’ve had no problems using the debit card at all and love saving the 5% on everything I buy. Target prices in my area are very competitive to other shops so I don’t feel like I’m being up-charged so that they can give me my discount.

  7. Kim says:

    Do I feel comfortable giving access to my checking account a company whose secure site has already been hacked once?
    I think I may stay with my own debit card and not include Target.

    • Travis says:

      That’s always a concern, Kim….but let me run a thought by you: Target thought they had their information secure before, then they were hacked. After the hack they poured a huge amount of resources into not only fixing the hole that was taken advantage of, but also looking for, identifying, and fixing anything else that they could find. I would assert that I am probably MORE comfortable with using this service through Target given the focus they’ve given to their security in the last year. Thoughts on that?

  8. Kim says:

    I thought is was only a credit card, so that’s very interesting. We don’t really have a Target close by, but I do like to shop there for a few things, like sheets and towels, and would probably order them online if I could get free shipping and it was cheaper than Amazon. Thanks for sharing.

  9. I didn’t know that, and since I shop at Target for most items other than groceries, it could probably come in handy. Like you said, 5% isn’t much, but every bit helps.

    • Travis says:

      It’d be interesting to see how much a person spends at Target over the course of a month and see how much would be saved with 5% off. the wheels are turning..lol.

  10. Pam S says:

    i have had the debit card version of Target’s RedCard for a few years now and have had no concerns. I live near a Super Target and do a lot of my grocery shopping there. The costs are comparable to other stores in the area, so the 5% really adds to my savings. It does take a few days for the charge to appear at my bank, but I enter charges into my budget immediately so not an issue for me. Between the card and their Cartwheel app, I’ ve saved hundreds!

    • Travis says:

      I’m glad you confirmed that it takes a few days for charges to show up to your checking account, Pam. As long as a person is diligent with their checking account it shouldn’t be a problem. I’ve heard about this Cartwheel thing….I’m going to have to check it out – thanks for the pointer!

  11. Kris says:

    Not only do I use the Target Red Debit Card regularly, I make a point to buy items I use when they are on sale as well. The additional 5% is a bargain when you are already saving 10-20% on an item at the sale price. In addition, I downloaded the FREE Target Cartwheel App, which gives an additional discount on several select items throughout the store. The discounted items range from books, movies, furniture, paper products, etc and they are always changing. If you are looking to buy something in particular, you can check Cartwheel to see if there is an additional discount. However, if you are worried that you might shop based on the discount, the Cartwheel App also gives you the option to scan items with your Smartphone to see if there is an available discount. Many times I scan my basket of goods just before checking out and find that something I have is discounted with Cartwheel as well. You MUST check this out!

    • Vicki says:

      I have the REDcard Debit and the Cartwheel App. It is a great combination. There are items there that I prefer to buy rather than at Walmart or Costco, such as clothing and furnishing. So when there is a sale, and I can use my Cartwheel, along with the Debit card with 5% – I save.

    • Travis says:

      You’re the second person to mention the Cartwheel ap….AND I have some Facebook friends that have mentioned it. I’m definitely going to have to check it out!

  12. We absolutely LOVE the Target REDcard! We have a Super Target that is 5 minutes away from our house so we that’s our go to spot. You can really save when you combine the REDcard with their cartwheel app, coupons from their website, as well as their exclusive mobile coupons. Every little bit adds up in the end.

  13. Andy says:

    I also read that you only have to charge a small amount to your redcard (like 1$) and you can pay the balance with cash while getting the discount on the whole total. Anyone corroborate?

    • Travis says:

      I know you can do that at Kohls with their store credit card…..get the 30% off by using your Kohls Card (and only charging $1) but still get the full discount.

      That might be something to look into if you were using the credit card version, but if it’s a debit card version it all comes out of your checking account – ie , you’re paying with “real money” anyway.

      It would be cool if someone could give a thumbs up or down on that though..thanks for the question, Andy!

      • Jay says:

        Thumbs up. There’s no reason to do that with the REDcard since it’s a debit card anyway. It’s a cool little trick to do with a store credit card, but my opinion is that it is still better to not have and not use any credit card because your purchasing behavior changes when you do, even if you can get the discount this way.

        • Travis says:

          I’ve learned that lesson the hard way, Jay. Earlier this year my wife and I got a Costco AMEX to earn cashback and had every intention of paying off the balance each month. Not only did that not happen, but we also started overspending again. Credit cards are not for us …… but since this is essentially just a 5% coupon and comes right out of our checking account, I don’t see how we can go wrong with it. Thanks for sharing your thoughts!

  14. I know you’re against credit cards, but I’d love to hear more of your thoughts on debit cards like this one.

    • Travis says:

      I wouldn’t do it if I had to open a new checking account with “The Bank Of Target” or some other bank. I don’t need another bank account. But since it’s linked to my current checking account, and it’s essentially a 5% coupon, I don’t have any problems with it. Although….I’m a little confused why they need to link it to a bank account – why couldn’t they just issue a customer number and keep banking institutions out of it? Maybe it’s their hope that people would sign up for the credit card…?

  15. Michelle says:

    I love, love, love Target but I DON’T love this!! For the simple reason that I NEVER leave the store without spending on average $100.

    Also, when you use debit/credit basic a plastic way to purchase an item you spend on average 30% more. There have been numerous studies that prove this theory.

    So, in reality you will probably spend more because that’s what most people end up doing. So, instead of “saving” 5% which is less than tax. You will spend 25% more. Boom. Target wins.

    • Michelle, my understanding is that those studies apply to “plastic” as in credit cards – not debit cards. Have you read a study that says people spend equal amounts whether they use debit or credit?

      • Michelle says:

        I’ve read those studies re: credit cards specifically. I just think it’s interesting that there are very few studies on the affects of using plastic (of all stripes) to purchase a good. I am sure that we will discover that people may still spend more because it’s not physical money in your hand. I will be researching this!!

        • I’ll be interested in knowing what you find out : )

          • Travis says:

            I’ve heard this as well….that if you use a card to pay (credit or debit) that you tend to spend more because it’s not money out of your hand. In most cases I would agree 100%….however, grocery shopping is one area where I’m as rigid as possible with my spending. I know what our grocery budget is – I walk around with a calculator and I don’t enter the checkout lane unless the total is under or equal to the amount I was planning on spending. Shopping at Target is even easier for me to stay on budget…..because when I go in there I’m usually only getting a handful of things I cannot get at my primary shopping outlet (Walmart). It’s like a military mission…get in, get what I need (and only what I need), and get out as fast as possible. 🙂

        • MMG says:

          I love Target and will go there in a heartbeat over Walmart! I’ve had no issues with my Redcard debit, and in addition to the 5%, you can also get cash back at the registers with no fee assessed by your bank.

          I concur that studies show on the average that people spend more when the purchase is associated with plastic, whether credit or debit. 5% may not be much, but when combined with apps and coupons that can give you a bigger discount, why not?!

          • Travis says:

            Getting cash back from your checking account is another perk I didn’t mention, MMG. Sometimes I need cash and I’m not anywhere near an ATM that wouldn’t charge me fees. Using the redcard to pay for my purchase, get 5% back and get cash without any fees is a good option to have. Thanks for mentioning it!

  16. Mackenzie says:

    We used to have the Target debit card, but when we changed our checking account, we never updated to get a new debit card. And honestly, it is fine for our wallet. Our problem with Target is that every time you go in there you can’t help spending more than what you actually went in there for. And when you know in the back of your head that “hey, I can throw this in the cart cause I’m saving 5% on everything!” And then you end up spending too much, even though you “saved” 5%.

    Bottom line: if you have strong willpower, than get the debit card. If you know that willpower is not your thing, then I would bypass the card. 🙂

    • Travis says:

      As long as I’m just going into Target for groceries or household items, I actually DO have that will power. As I mentioned above, it’s like a military mission – get in, get what I need, and get out. Plus, 99% of the time I go into target it’s on my way from work, and I’m in a time crunch – so I don’t have time to go shopping around. On the other hand, I can understand the temptation…..I learned that the hard way this year with our Costco AMEX. No more credit cards for us. Since this is coming right out of our checking account it will immediately affect our budget and the funds we have available…so that will be another deterrent. Thanks for sharing, Mackenzie!

  17. Jay says:

    I’m not a credit card user, but since the REDcard isn’t a credit card I chose to get one. Like you, I only shop at Target for a small handful of things and see no downside to having this card. It’s nothing more than a store-specific debit card. The 5% discount is ok, nothing earth shattering, but for things we buy regularly (we have 3 Saint Bernards and a Great Dane, and Target carries the dog food we prefer) it’s better than not saving 5%.

    • Travis says:

      Wow, with 4 big dogs, I would bet the 5% on your dog food adds up pretty quickly, Jay…..that’s a LOT of dog! 🙂

    • kathleen says:

      Have you tried getting your dog food from amazon subscribe and save? Generally you save about 20% and it comes to your front door I increments between 1 month and 6 months, my cat food isn $10 cheaper.

      My question is how safe is it having another entity linked to your bank account?

  18. We looked into this when we started going to Target more often for our groceries, and I did see the debit card option. I was tempted to go with that, but we ended up getting the credit card. 5% is not a huge discount (I was actually sad to see how much we’ved saved so far), but it doesn’t hurt! We live just down the road from a Super Target, so it works out well.

    • Travis says:

      As long as it works for you, Erin….no more credit cards for you. If Super Target is that close to you, and you shop there often because it’s so convenient, I bet the savings will add up pretty quickly over time. Thanks for reading!

  19. Catherine says:

    I thought about it however there was a massive security breech, just in Canada I believe, with Target RedCards so I decided against it after that. I had an issue once with identify theft that was enough ahah. Also we only go to Target like every two months, maybe…

    • Travis says:

      There was a huge security breach in the US too….but I figure that after handling that situation, they’ve probably got all kinds of new security features in place and are much MORE secure than most stores at this point. But it’s something you always have to look out for….great to hear from you Catherine!

      • kathleen says:

        Every store has been hacked at some point. Cash is the safest…..but not saving money when you have an easy opportunity to is hard.

  20. Blanca says:

    I have the target red debit card and I am not happy with it at all. It discounts the 5% after all your coupons and any gift cards you are using so for me it does not amount to much.

    • Travis says:

      Well, on the other hand, you are also getting coupons and gift cards taken off your purchase. 🙂 I would think that you wouldn’t always have coupons and gift cards…and it’s still a non-zero value for literally no effort. 🙂 Thanks for sharing your experience!

  21. My wife and I got a Target REDcard debit card about three years ago (around the time we got married) and it was a great choice. I’ve written about it a couple times over the past two years including a post about some of the negatives. The only real negative I could think of is that they are (obviously) using it to track your purchases and sometimes give you targeted coupons based on past purchase behavior (not a complaint for me!). We live VERY close to a Target so we shop there quite a bit. As you can imagine, we’ve saved hundreds over the past few years. I’m shocked that people who shop at Target regularly do not have it.

    The free shipping is great, too. Plus you still get 5% off online purchases! Granted I hate their website…

    • Travis says:

      ooh, tracking purchases is a good theory as to why they have such a service. But hey, if it’s just used to give coupons for products I usually buy anyway, I’m all for it!

  22. Julie G. says:

    Please keep us posted on how this works out for you since you had recently posted that Credit Cards were not for you or your family! I wonder if I would go in thinking it is ok to put something else in my cart thinking that I get 5% off everything 😉

    • Travis says:

      I certainly will, Julie….the only reason i would even dare venture into using a REDCard is because it’s not a credit card – it’s simply an alternate form of using my debit card. It will be interesting to see if it causes me to shop more at target, or increase how much I spend. Thanks for stopping by!

  23. We had a Target credit card that saved us 5% on purchases. After every purchase, I just headed to the customer service counter and paid it off. Didn’t take long at all, I saved 5%, and never got a bill! After their big fiasco, I closed the account and received a new card that I still haven’t activated. I should probably do that before we start Christmas shopping;0) I would actually rather have the credit card than the debit card … I simply feel safer that way.

    • Travis says:

      That’s a great way to handle the credit card version. Have you ever thought about getting the debit card version that just links to your existing checking account.

  24. Alysha says:

    I have the REDcard and love that I can save 5%. I have a Target right across the street from where I work so it is very convenient. I also have the cartwheel app which is another thing Target has to get you a discount on certain items. The percent ranges from 5-50%. That is a life saver as well.

  25. Becky says:

    I’ve had one for 2.5 years. It’s amazing. Plus, you can use the cartwheel app to save even more. AND, you can use a manufacturer coupon PLUS a store coupon on items to save even more. I’ve saved $300 this year with my red card alone.

    • Travis says:

      That’s some great savings, Becky! Good info that you can use a manufacturer AND a store coupon to save…many retailers will only let you use one or the other, I believe. Thanks for dropping down!

  26. Elizabeth Brown says:

    I know there have been no comments on this for awhile but… I was searching for the reason/advantage to Target for offering the RedCard debit card (which I’ve had for a few years now). Besides the obvious that was mentioned: to draw customers by saving them 5%, which is worth it to Target if they can draw you away from Wal-Mart etc for the same purchase. But I’m also trying to dig deeper into the banking fees side of things. I still need to look into the ACH (Automatic Clearing House) side of things but this is what I’ve found as far as Vendor fees… When you use your Visa or MasterCard (the Vendor) debit card no matter what bank issues it to you, the retailer (Target, Wal-Mart, Best Buy, Home Depot… every retailer) has to pay a fee to the Vendor (some percentage of your total purchase) and then they pay that to the issuing bank (your bank) or something like that. The point is since retailers pay the fees (they pay even higher fees to the Vendor if you sign your debit transaction instead of using the PIN or for credit card transactions). It doesn’t change the consumer price at the register but you can be sure retailers include those fees in the cost of their merchandise.
    ***My guess is Target is in someway bypassing these fees by issuing the RedCard debit card themselves. In a way that can eventually save their customers money if it can lower their fees to the Vendors to the point of them being able to keep their prices lower. I couldn’t tell you whether giving customers 5% off vs their fees has saved them yet. More people need to use it for that to happen. That’s probably why they push it EVERY TIME you are at the register.

    • Travis says:

      I don’t know if they are able to bypass it totally, Elizabeth….as there’s surely a bank that handles the backend processing of the RedCard. but I’d bed that they get a reduction in the fees charged – which could save them a ton of money in fees over the course of a year. Thanks for sharing your thoughts!

    • Ray says:

      In response to “That’s probably why they push it EVERY TIME you are at the register.”

      I know this thread is old but thought I’d respond to that last bit of your comment. Having recently been hired as a cashier at Target (last week), I can tell you that asking about the Red Card is actually a job requirement. If we don’t ask or get enough people to sign up per shift we get in trouble and can eventually be fired.

      Having said that, I’ve just signed up for the debit card version and am quite excited about it. I get a 10-20% employee discount, plus savings from the Cartwheel app, and now an additional 5% off once I get the card. That’s an astonishing amount of savings.

      Only thing I’m worried about is how my bank (BoA) will react. There aren’t any fees from Target, but does anyone know if banks can charge you for using a different debit card?

  27. James Dominguez says:

    I got one today and I found your blog that explains it when I did a Google search. It’s a great savings if you do your grocery shopping there evry week. 5% adds up. Thanks for the clear explanation.

  28. Lala says:

    I actually do have the card. I love it! Originally I had the credit card, but the interest seemed way to high, so I called to cancel it… but somehow winded up being told that I could get the same benefits with the debit card and switched. It’s also great because you can get cash back. Here is why that’s a good thing – I lost my debit card on a Saturday afternoon. Bank closed and needed money to get me by till Monday – well my lovely target debit card did the trick. It literally saved me. 🙂

  29. Stokely says:

    The gray/black fruit of the loom A-shirts (tank tops) go for $11.39 online for a 6 pack at Target, which roughly equates to $1.90 per tanktop (or a $1.80 after the 5% discount using the redCard). The next best price is Walmart which sells a 4-pack of these same gray/black A-shirts for $12.96 or $3.25 a tanktop. That’s nearly a 50% savings. I hardly use Target because their prices are never been than Walmart or other retailers, but this is an instance where using the RedCard is very beneficial. I’m sure the in-store price mirrors Walmart’s price. And if you buy it online without using the RedCard, they add a hefty $6 shipping price making it $3/tanktop. My biggest concern with the RedCard is the feasibility of using it as a debit card. I am an enemy of debt and I avoid credit card at all cost (pun intended). I’m just worried that this RedCard like most credit card promotions (Marriot, Delta, etc) have some catch or terms and conditions we don’t know about…and later to find out just to discover it’s not much of a deal. The APR on the Red Card can hit over 23% even if you have good credit like me. I don’t know much about the RedCard and would love to know people’s longterm experience with it. Having no yearly fees is great, but that alone isn’t enough for me to buy this promotion.

    https://www.target.com/p/fruit-of-the-loom-men-s-4-2pk-tank-undershirt-black-gray-l/-/A-52457985

  30. Brandy Glasco says:

    I really don’t shop at Target at all when I shop at Wal-Mart . What I’m asking is it a credit card my boyfriend said it’s like an iTunes card.

  31. Virginia Martinez cook says:

    Well I have a question I’m looking for a target credit card that I can add money and do like on line transactions are direct to my bank account … And like if my sis that live out of state could send money that could go directly into my account so I could withdraw from out my account like atm is there one

  32. Lavinia M Redmond says:

    My son works at Target. Today he asked to borrow the card to go get a target red card. He was told he needs a blank check from BoA so his red card can be linked to his checking account. So, he goes to BoA and gets the official document from BoA that has a blank check on it with any and all additional information needed in order to complete the process. He leaves BoA, gets to his job, Target, and 2 team leaders tell him that the official document that the bank gave him isnt official enough…they said it needs to be a blank voided check. Well, that’s exactly what he had from BoA. So he listens & teturns to BoA, who of course tells him that the document is a blank voided check & if your job wants you to have a check that ripped out of a checkbook, you’ll have to order checks which take 15- 30 days to process. Frustrated, my son calls me. I tell him go to the higher ups at Target or better yet call the toll free employee service line for the target red card and have them talk to the 2 glorified dummy team leaders who have u running around like a chicken with his head cut off and let them get schooled bc at this point you’re wasting my gas money lolbvvs. What say you?

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