The Target Credit Card gives you 5% back on Target purchases if you use the card in-store or through the Target app, and 1% back on everything else
The Target RedCard comes in two versions: a credit card and a debit card. The credit card version earns 5% cash back on purchases at Target and Target.com, plus 1% cash back on all other purchases made with the card. There is no annual fee. The main trade-off is that the 5% rate only works at Target — you get the lower 1% rate everywhere else, which is less competitive than cards designed for general spending.
Whether it makes sense depends on how much you spend at Target each year and what other cards you already have. If Target is where you do most of your shopping, the 5% back adds up. If you shop there occasionally and use other cards for groceries and gas, the card may not save you money.
Key Takeaways
- The Target RedCard credit card earns 5% cash back only at Target stores and Target.com, not at other retailers.
- You earn 1% cash back on all other purchases, which is lower than many general-purpose cash back cards offer.
- There is no annual fee, so the card costs nothing to hold if you do not use it.
- The card is worth keeping if you spend at least $1,000 per year at Target; below that, the rewards may not offset the opportunity cost of not using a higher-rate card elsewhere.
- You must set up the card in the Target app or on Target.com to use the 5% rate; swiping the physical card at checkout still earns 5%, but you get the full benefit only if you are logged into your Target account.
How the 5% cash back actually works
The 5% rate applies to purchases made at Target stores and on Target.com. You do not have to do anything special — just use the card. The cash back appears as a credit on your Target RedCard account, not as a deposit to a bank account. You can use the credit to pay your bill, or you can request a refund to your bank account, though some cardholders report this takes longer than a statement credit.
The 1% rate on non-Target purchases is automatic. You earn it on gas, groceries, restaurants, and any other merchant. However, 1% is the floor for many cash back cards. A card like the Citi Double Cash or the Capital One Quicksilver earns 1.5% to 2% on all purchases, which means you are giving up 0.5% to 1% on every dollar you spend outside Target.
When the Target card makes financial sense
The card is most useful if you shop at Target regularly and spend enough there to make up for the lower rate elsewhere. If you spend $2,000 per year at Target, the 5% back equals $100. If you spend $500 per year at Target and $5,000 elsewhere, you earn $25 at Target but lose $50 to $75 compared to a 2% card on the non-Target purchases — a net loss.
The card also makes sense if you use Target's same-day services: Drive Up, Order Pickup, or Shipt delivery. These services are exclusive to Target, so if you rely on them, you are already committed to the store. The 5% back then feels like a natural bonus rather than an incentive to change your shopping habits.
The no-annual-fee structure means you can hold the card without penalty even if you use it rarely. Some people keep it for Target trips and use a different card for everything else. That approach works if you remember to switch cards and do not end up using the Target card for non-Target purchases out of habit.
What the Target card does not offer
The Target RedCard has no sign-up bonus, no travel rewards, no purchase protection, and no extended warranty coverage. It does not earn bonus points on categories like groceries or gas. If you are looking for a card that rewards you across multiple spending categories, this is not it.
The card also does not offer the same fraud protections as many other credit cards. Target's fraud liability policy is similar to most issuers — you are not responsible for unauthorized charges — but the card itself does not include benefits like purchase protection or return protection that some premium cards provide.
How the Target debit card compares
Target also offers a RedCard debit card, which pulls money directly from your bank account. It earns the same 5% back at Target and 1% everywhere else. The debit version has one advantage: you avoid credit card debt entirely. The disadvantage is that debit cards offer weaker fraud protection than credit cards, and disputed charges can tie up your actual bank balance while the dispute is resolved.
If you have the discipline to pay off a credit card in full each month, the credit version is safer. If you tend to carry a balance, the debit card prevents you from accumulating interest, though you lose the ability to build credit history.
Comparing the Target card to other options
If you want a card that earns cash back everywhere, not just at one store, consider a general-purpose card. The Citi Double Cash earns 1% when you buy and 1% when you pay the bill, totaling 2% on all purchases. The Capital One Quicksilver earns 1.5% on everything. The Chase Freedom Unlimited earns 1.5% on all purchases and has a sign-up bonus.
If you want to maximize rewards at specific stores, compare the Target card to store cards at other retailers you frequent. Many grocery chains, drugstores, and department stores offer their own cards with category bonuses. The question is whether the 5% at Target beats the rewards you could earn by splitting your spending across multiple store cards — and whether you want to manage multiple cards.
How to decide if you should open the card
Start by adding up what you spent at Target in the past year. If that number is under $1,000, the card is unlikely to pay for itself. If it is between $1,000 and $3,000, the card probably makes sense. If it is over $3,000, the card is worth keeping as long as you do not use it for non-Target purchases at a lower rate than you would get elsewhere.
Next, check what card you currently use for non-Target purchases. If you use a 2% cash back card for everything, switching to the Target card for Target purchases and keeping the 2% card for everything else means you gain 3% at Target but lose 1% everywhere else. That trade-off is worth it only if Target spending is significant enough to offset the loss.
Finally, consider whether you will actually use the card. If you shop at Target online, you need to make sure the card is linked to your Target account to earn the 5% rate. If you shop in-store, you need to remember to bring the card or have it in your digital wallet. Small friction points can make a card feel like a hassle rather than a benefit.
Frequently Asked Questions
Do I earn 5% back if I use the Target card at other stores?
No. The 5% rate applies only to Target stores and Target.com. At all other merchants, you earn 1% cash back. If you use the card at a grocery store, gas station, or restaurant, you get 1%, not 5%.
Can I use the Target RedCard to pay my Target credit card bill?
You can use the Target debit card to pay your Target credit card bill, but using one Target card to pay another does not earn rewards. The payment itself does not trigger cash back. Pay your bill from a bank account or another card instead.
What happens to my cash back if I close the card?
Any cash back balance remaining on your account when you close the card is typically forfeited. Some cardholders have reported being able to request a refund before closing, but this varies. Check your account or call Target's card services before closing to confirm what happens to your balance.
Does the Target card help me build credit?
Yes, the Target credit card reports to the three major credit bureaus and helps you build credit history the same way any credit card does. The debit card does not build credit because it is not a credit product. If credit building is a goal, use the credit version and pay it off in full each month.
Is there a limit to how much cash back I can earn?
Target does not publicly state a cap on cash back earnings. You can earn 5% back on every Target purchase and 1% on every other purchase with no stated maximum. However, if you use the card for fraudulent purchases or violate the card agreement, Target can close the account and forfeit rewards.