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Target REDcard Credit Card: A Good Deal If You Know How to Use It

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

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When the words “retail store branded credit card” (or some variation of the phrase) are uttered, your response should be to turn and run. Store cards are notorious for being “bad” financial products for a variety of reasons.

The incentive that’s meant to rope you in – like 10% of your purchase – is temporary; the interest rates on the cards are upwards of 20%; the minimum payments are incredibly low, which encourage people to maintain high balances that rack up that nasty amount of interest; and many come with hidden fees (or just high fees) that can cost you even more money.

But there’s one store card that might offer a slight exception to the rule that says avoid store credit cards at all costs: the Target REDcard™ Credit Card. Let’s take a look at this card to see if it can benefit frequent shoppers – or if it’s just another credit trap waiting for uneducated consumers.

How the REDcard Works

The Target REDcard™ Credit Card offers shoppers 5% off in the form of an instant discount on every purchase made in stores or online (some restrictions apply). It’s a store branded card that does not have an annual fee – or a complicated rewards program, as again, the reward is given immediately upon purchase. The card can only be used at Target stores and Target.com.

Target REDcard vs. Target Prepaid REDcard

The Target REDcard™ Credit Card is a regular credit card, not to be confused with Target's prepaid REDcard product.

A prepaid card is loaded with funds each month by the user who can then use those funds as they wish, like a regular debit card. Most people use prepaid cards as a budgeting tool or as an alternative to a checking account. Prepaid cards do not factor into your credit report and, as a result, have no impact on your credit score.

With a credit card, you are borrowing funds from a bank and must pay them back each month or face penalties, fees, and a likely hit to your credit score.

What Do You Get with a REDcard? 

The best thing about a Target REDcard™ Credit Card is that you get your 5% at Target & Target.com discount at every checkout, no gimmicks or strings attached. It applies to everything you can buy in the store, including items already marked down or on sale, and you can use it while applying other coupons to your purchase.

The exception is that you will not receive 5% off the following purchases:

  • Prescriptions, over-the-counter items located behind the pharmacy counter and clinic services at Target
  • Target Optical™ eye exams
  • Target gift cards and prepaid cards, and Stockpile and Gift of College gift cards
  • Certain restaurant merchants in Target stores, such as D’Amico & Sons Italian Kitchen and Pret A Manger
  • Gift wrap and shipping and handling charges on Target.com purchases
  • Wireless protection program purchases and deposits required by a mobile carrier

In addition to the 5% discount, you’ll receive free shipping on any purchase online, an added benefit if you’re an online shopper.

There are no points to earn and redeem, no statement credits to request, no hoops to jump through. Just straight-up 5% off on your purchase – and free shipping if you’re shopping Target.com.

The Pitfalls of Target’s REDcard You Must Avoid

Of course, the benefits quickly evaporate should you make one tiny mistake with your Target REDcard™ Credit Card. The variable interest rate – at 25.15% Variable APR – is high, and makes the 5% savings completely inconsequential if you’re only paying the minimum.

Ultimately, despite the better-than-average perks, the Target REDcard™ Credit Card is a store branded credit card and comes with the typical pitfalls: high interest rate, high fees, low minimum payment requirement designed to encourage people to revolve balances.

Not to mention, most REDcards come with low limits since you can only use them at Target stores. This could hurt your credit utilization ratio – and therefore, your credit score as a whole – if you don’t have many other credit cards. Remember, credit utilization is based on your total credit limit, not per card.

If you’re just starting to build your credit, the REDcard’s 5% may not be worth the downsides of holding the card.

Fine Print

To sum up, here’s what you need to know before considering this credit card:

  • The REDcard grants you a 5% discount on nearly every purchase at Target and Target.com. This discount is immediate upon checkout, so it’s more like a guaranteed discount on your Target purchase than other forms of money back.
  • You’ll receive free shipping online at Target.com when you use your Target credit card.
  • The APR can be as high as 25.15% Variable.
  • Minimum payments are low, which encourages consumers to make small payments on balances over long periods of time – costing an incredible amount in interest fees.
  • Late payment fees run up to $38. Returned payment fees run up to $27.

If you miss a payment, are late on a payment, or only pay the minimum balance, your 5% savings will be automatically negated.

Only use the Target REDcard™ Credit Card if you have established a history of paying your balances in full and on time – and can manage your money so you only purchase what you budgeted for and truly need.

There’s also one more issue that consumers should be aware of, although whether it’s “good” or “bad” is probably a matter of personal preference. In the interest of full disclosure, however, we believe in making note of the fact that Target does use its branded store cards to collect data and information about you and what you buy.

In Conclusion

Target’s REDcard is a great financial product for people who frequently shop at the store for everyday purchases on necessary items like toiletries, household goods, school supplies, and clothing. There’s no annual fee and the automatic 5% discount is an excellent way to save even more money when you do your regular shopping.

However, there are big consequences for missing payments or getting trapped into revolving your balances month to month. The late payment and missed payment fees are high, and the variable interest rate is alarming at 24.15%.

You may want to avoid picking up this card if you’re not a normal Target shopper – and the promise of a “reward” will encourage you to spend money that you would not otherwise. And most certainly avoid this store card like you would any other if you struggle to manage your money and your credit.

Otherwise – if you’re experienced in managing your purchases and your credit, and already have good credit – the REDcard is a great option if you’re looking to save even more on necessary purchases and spending you already do.

Target REDcard™ Credit Card

Target REDcard™ Credit Card

Annual fee
$0
Rewards Rate
5% at Target & Target.com
Regular Purchase APR
25.15% Variable

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kali Hawlk
Kali Hawlk |

Kali Hawlk is a writer at MagnifyMoney. You can email Kali at [email protected]

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Sallie Mae Accelerate Credit Card Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

If you’re looking for a cashback credit card, the Sallie Mae AccelerateSM offers an OK flat APR along with an interesting incentive — bonus cash back when you use your rewards to make a payment on a student loan. At a time when American college students and graduates are facing daunting levels of debt, this could be another weapon in your arsenal to apply toward paying down student loans. Let’s take a look at the details of what this card offers, where it falls short and how it stands up against other cashback cards.

Where the Sallie Mae AccelerateSM stands out

Chance to earn bonus cash back. Unlimited 1.25% cash back on every purchase. Earn a 25% bonus on your cash back rewards used to pay down your student loans. You can earn the bonus toward both federal and private student loans.

No annual fee. This card’s annual fee is $0, and since it’s targeted at recent college grads who are often on a tight budget, that’s important.

Additional benefits

Intro APR. Get a 0% Introductory APR for purchases for 12 months. After that, a 14.74% to 24.74% variable applies. The intro purchase APR is a decent amount of time to purchase a big-ticket item and pay it off without accruing interest charges, but there are cards with longer intro periods listed on our site.

Cellphone protection. When you pay your cellphone bill with this card, you can get up to $600 per claim in cellphone protection. Note that this is secondary coverage only (meaning it kicks in after any other insurance) and each claim is subject to a $50 copay. Terms apply.

Free FICO Score. The FICO® Score is one of the most common credit score models around. If you apply for a credit card, car loan or other credit product, it’s likely the bank will check your FICO Score before approving or declining you. Your FICO Score will influence the interest rate that you can get approved for – it’s smart to keep an eye on it.

Read: View Your Free FICO Score for all 3 Credit Bureaus

Where the Sallie Mae AccelerateSM falls short

Low cashback rate. It’s pretty easy to find a credit card that offers 1.5% cash back, and some offer up to 2% — and that’s just for flat-rate cards. You can earn up to 5% cash back with cards such as the Discover it® Cash Back, which offers a 5% cash back in rotating quarterly categories (up to $1,500 in purchases each quarter you activate, then the rate drops to 1% cash back).

Earning 1.25% on the Sallie Mae AccelerateSM doesn’t cut it. And while it’s true that you can earn a 25% bonus on your cash back when applied toward a student loan, that’s likely not a big enough bonus to make up for getting a subpar cashback rate on all your purchases.

The minimum amount of cash back to redeem is $25.

Discover it® Cash Back

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on Discover Bank’s secure website

Rates & Fees

Discover it® Cash Back

Annual fee
$0
Intro Purchase APR
0% for 14 months
Regular APR
13.49% - 24.49% Variable
Rewards Rate
5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate, 1% unlimited cash back on all other purchases - automatically.
Credit required
good-credit
Excellent/Good

Foreign transaction fee. If you use the Sallie Mae AccelerateSM outside the United States, there’s a foreign transaction fee of 3% of each transaction in U.S. dollars. It’s better to leave this card at home and travel with a card that charges no foreign transaction fee.

Compare it with the Citi® Double Cash Card – 18 month BT offer

One of the best cards around for earning flat-rate cash back is the Citi® Double Cash Card – 18 month BT offer. Let’s take a look at how the two cards compare:

 

Sallie Mae AccelerateSM

Citi® Double Cash Card – 18 month BT offer

Rewards

Unlimited 1.25% cash back on every purchase. Earn a 25% bonus on your cash back rewards used to pay down your student loans.

Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay.

Purchase APR

0% Introductory APR for purchases for 12 months. After that, a 14.74% to 24.74% variable APR applies.

15.49% - 25.49% (variable)

Balance transfer APR

14.74% to 24.74% variable

Intro 0% for 18 months on balance transfers. After that, a 15.49% - 25.49% (variable) APR applies.

Annual fee

$0

$0

Foreign transaction fee

3% of each transaction in U.S. dollars.

3%

The clear winner is the Citi® Double Cash Card – 18 month BT offer, with a cashback rate that’s 0.75% higher than the Sallie Mae AccelerateSM. Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay. (We recommend paying your card in full each month if possible.)

Another strong choice for flat-rate cash back is the Capital One® Quicksilver® Cash Rewards Credit Card, which earns 1.5% cash back on every purchase, every day.

Capital One® Quicksilver® Cash Rewards Credit Card

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on Capital One’s website

Capital One® Quicksilver® Cash Rewards Credit Card

Annual fee
$0
Intro Purchase APR
0% intro on purchases for 15 months
Intro BT APR
0% intro on balance transfers for 15 months
Balance Transfer Fee
3%
Regular Purchase APR
15.74% - 25.74% (Variable)
Rewards Rate
1.5% Cash Back on every purchase, every day
Credit required
good-credit
Excellent/Good

The bottom line

Earning bonus cash back when you use your rewards toward student loan payments is an interesting feature offered by the Sallie Mae AccelerateSM. However, the card’s cashback rate is subpar, and a card such as the Citi® Double Cash Card – 18 month BT offer or the Discover it® Cash Back can put more rewards back in your pocket.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Glen Luke Flanagan
Glen Luke Flanagan |

Glen Luke Flanagan is a writer at MagnifyMoney. You can email Glen Luke here

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Bank of America Cash Rewards Card Review: Solid Card for Spending on Groceries and Gas

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

BankAmericard Cash Rewards Review

Travel may be the credit card rewards of choice for many, but if you prefer cold, hard cash to airline tickets, there are plenty of other credit card rewards programs out there for you. Some of them, like the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer, even come with a $0  annual fee.

To help you decide if this is the right option for you, we’ll cover:

  • The basics of the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer
  • Benefits
  • The fine print
  • The pros and cons
  • How to get the most value

All You Need to Know About the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer

Bank of America uses a tiered rewards structure, meaning that you earn more cash back for certain types of spending and less for other spending.

With the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer, you earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, 1% on all other purchases. So, on every single purchase you make, you’ll earn at least 1% back. That means for every dollar you spend, you’ll earn a penny. These aren’t rotating bonuses similar to other cashback card reward programs. There is no opt-in registration required.

The 3% choice category allows you to tailor the rewards to fit your spending, which is a nice feature that gives the card some flexibility. The choices include: gas, dining, drug stores, home improvement/furnishings, online shopping and travel. You can change your category of choice once a month for future purchases through the Bank of America mobile app. So, if you’re remodeling your home next month and going on a big trip the following month, the ability to change categories could put more cash in your pocket if you think ahead and change your category strategically.

However, these programs are limited to the first $2,500 you spend per quarter on both gas and groceries combined. After that, your purchases at gas stations, grocery stores and wholesalers will earn only 1% until the next quarter when the higher bonuses will automatically resume until you again hit that $2,500 quarterly limit.

Right now, you can earn a sign-up bonus of $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening. For comparison, that spending requirement to get the sign-up bonus falls in line with the requirements for many other cash back cards currently on the market. Most cards require you to spend $1,000 to get a bonus of $150 or $200 bonus while some allow you to spend just $500 to get a $150 bonus.

How Cash Back Works

You can redeem your cash rewards in any amount at any time you wish as a statement credit or as a direct deposit into to your Bank of America checking or savings account, or as a contribution to an eligible account with Merrill.

You can also redeem your cash rewards by requesting a check. For checks, or for credit to an eligible 529 account with Merrill, the minimum amount you need to cash out is $25.

You can earn even more cash back if you are a Preferred Rewards member. This rewards program comes with three tiers.

If you keep a total three-month average combined balance of $20,000 in your eligible Bank of America personal checking or Bank of America Advantage Banking, and eligible Merrill investment accounts, you qualify for Gold status. At this level, you earn 25% more cash back on every purchase.

The next level is Platinum. It requires your three-month average combined balance to total $50,000. At this level, the bonus is 50%, which turns $100 into $150.

The highest level is Platinum Honors. To qualify, your assets must average at least $100,000 per month. The bonus at this level is 75%, so your $100 turns into $175.

The Fine Print

Every card comes with some fine print. First, let’s take a look at the fees associated with the Bank of America® Cash Rewards credit card:

  • $0 annual fee.
  • Enjoy a 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days, and 15.49% - 25.49% Variable APR afterward.
  • A balance transfer fee of Either $10 or 3% of the amount of each transaction, whichever is greater..
  • You’ll need at least a credit score of 700 to qualify.
  • Late payment fee is up to $39.
  • There is a returned payment fee of up to $28.
  • 3% foreign transaction fee.

You’ll also want to know what qualifies as a grocery store. The overarching theme is that if the store primarily sells food, it qualifies. However, if the store sells other goods along with food, like drug stores and superstores, your purchases will only earn 1%. Here are some places that will earn you the full 2%:

  • Supermarkets
  • Wholesale clubs
  • Meat lockers
  • Candy stores
  • Nut stores
  • Confection stores
  • Dairy product stores
  • Bakeries

In the gas category, you’ll only earn 1% at truck stops, superstores and supermarkets, but you can earn the full 3% by shopping at merchants whose primary business is the sale of:

  • Automotive gasoline
  • Heating oil
  • Propane
  • Kerosene

One other place that qualifies is boat marinas.

How to Get the Most Value from the Cash Back Program

If you have a Bank of America checking or savings account, it’s wise to redeem your rewards via direct deposit for any amount at any time while avoiding the risk of a paper check getting lost in the mail. If you meet the asset requirements, it’s worth applying for the Preferred Rewards programs so you can reap the significant the bonuses.

Use the Bank of America calculator to see how much cash back you can earn based on your rewards choice category and your spending. It’s worth looking back over your bank or credit card statements from the past year to make sure you choose the category that will earn you the most cash back based on your actual spending habits.

However, there are other, possibly more lucrative cash back card offers available. For rewards on everything, the Citi® Double Cash Card – 18 month BT offer  allows you to Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay.. It also carries a $0 annual fee.

There are also other options on the market that allow you to earn more cash back for gas purchases. The PenFed Platinum Rewards Visa Signature® Card gives you 5x points on gas at the pump, 3x points on groceries, and 1x points on all other purchases. You can qualify for this card by opening an additional financial account with PenFed Credit Union.

In summary, the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer is a good choice if you prefer cash back over travel rewards and spend a lot on gas and groceries. But you may want to shop around and crunch numbers based on your actual spending to see if another cash back card is a better fit.

Benefits and Protections

The Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer does come with some benefits. The most powerful is perhaps $0 liability guarantee. You will not be held liable for any fraudulent charges as long as you can support the fact that they were, indeed, fraudulent. This may also kick in if Bank of America notices suspicious activity on your account.

The final benefit worth noting is the ability for Bank of America customers to enact Overdraft Protection. If you have a checking account with Bank of America, you can link it to your card to prevent any instances of declined purchases.

Pros and Cons

Pro: Bank of America and Merrill customers can enhance their cash back with bonuses.

Con: Even with these bonuses, you can find another card with higher cash back rewards.

Pro: No rotating categories to keep up with.

Con: There is a $2,500 cap per quarter for gas and grocery rewards.

Pro: The $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening is a decent reward for a low minimum spend.

Con: It does have a foreign transaction fee of 3%. There are other cards on the market that would be better to use outside the country.

Pro: $0 annual fee.

Who Will Benefit Most from the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer?

The biggest winners are those who have a checking or savings account with Bank of America and spend about $2,500 per quarter on groceries and gas combined. That comes out to about $833.33 per month, so if you commute a long distance or travel a lot for work, this may be a good option for you. If you’re feeding a family, this may also be a good option as the caps on other cards can be more restrictive.

The information related to Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer and the Citi® Double Cash Card – 18 month BT offer has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Allie Johnson
Allie Johnson |

Allie Johnson is a writer at MagnifyMoney. You can email Allie here