Target Credit Card to Save 5% - Yay or Nay?

[Coconut Water]

The 5% discount offer (no minimum) is really appealing at Target which supplies many essentials I am going to need at UCLA. The store is right next to campus, so it's super convenient. 

 

I am concerned with the risks of amassing debt, a lesson learned the hard way. 

 

I am also concerned with security. I think I can apply online or at the store.  How does one know these days when it's safe to divulge a social security number? Seems wise to avoid whenever possible. But I need to start saving now.

 

Should I skip the complication? What would you do? 

 

I see myself shopping at Target for these unavoidable expenses: medical stuff (but not pharmacy), toiletries, food, snacks, household (trash bags), possibly a small kitchen appliance or two, kitchen cooking stuff, possibly clothing (quality tee-shirts). 

Edited July 15, 2014 by Coconut Water

[Quantum Buckyball]

I got myself a Target RED card last year because I realized I was shopping there pretty often and they offer weekly coupons. I applied online and was able to get an approval with 2K credit limit within 10 min after I submitted my application. I've heard a lot of people applied and only got $200 ~ 700 credit limit due to their credit score and credit history. The Target near where I live recently re-innovate from a standard Target to a Super Target (w/ grocery). 

 

I like Target brand generic products, 

[ProfLorax]

It really depends on how you are as a shopper. I have a handful of store credit cards that I use for the discounts, but I always pay them off as soon as I get home. The interest rate is often much higher than the discount, so if I don't pay if off right away, I've lose all the benefits pretty quickly. That also means that I never put anything on store credit cards that I can't pay off right then. 

[Vene]

If you pay off the balance right after you use the card you won't accrue interest, do if you think you can do this it may be worth it. The moment you carry over a balance is the moment where Target wins out and takes your money.

[TakeruK]

Like everyone else said, you should never accrue debt on your credit cards. I only use them as a way to delay payments (by a few weeks) and to gain whatever benefits the card provides. I think it hurts your credit to have too many credit card accounts open, and I personally find it confusing to keep track of so many (but it's up to you what you are capable of!). So, I always decline to join store credit cards but I do have one credit card from my bank. I also think a credit card from a bank is better for your credit than one from a store.

 

My bank credit card effectively gives me a 1% to 5% discount on everything I buy depending on the type of purchase. This is pretty good for me so I prefer to just have this card and make all my purchases with it. If you are willing to manage a target card, make sure you only use it at Target because you only get the discount at Target! Once you use it elsewhere, Target also wins. For me, I probably spend $400/year at Target, so 5% is $20 but my normal credit card gives me at least $4 back, so the difference is $16. I don't think $16 is worth it for me to deal with an extra bill each month, but that's my personal choice! However, I recommend thinking along these lines if you are deciding whether or not it will be worth it.

[rising_star]

I'm like TakeruK in that I have multiple cards I use for discounts. I have a Target credit card (the one that you can only use at Target and target.com), which I use whenever I shop there for the discount. I get the statements electronically and you can set up a reminder online to pay for bill X days before it's due, which I do so I never miss a payment. Alternately, you can pay in the store at the customer service desk (which you can do on your way out the door if you really want). I also have several other cards that offer 1-5% cashback on purchases depending on the store, the quarter, and other factors. I use those cards for everything I can (rent, groceries, restaurants, etc.) and pay all of them off in full each month. No debt and I can use the cash back I earn to get giftcards or checks in the mail.

[Vene]

I think it hurts your credit to have too many credit card accounts open, and I personally find it confusing to keep track of so many (but it's up to you what you are capable of!).

I've heard it's more of a function of current debt versus available credit meaning more available credit is good. But, requesting more lines of credit is a hit against your score.

[TakeruK]

I've heard it's more of a function of current debt versus available credit meaning more available credit is good. But, requesting more lines of credit is a hit against your score.

 

Yes, I have heard the same and this is what I meant. Thanks for clarifying! (That is, opening the accounts is what hurts you, not simply having them open--and in fact never closing your first credit account is a good idea!)

[Maleficent999]

You can get a Target debit card. That's what I have. You give them a voided check and they link your Target debit card to your bank account. You get 5% off still and that way you're not spending borrowed money, you're just using money in your checking account. I've had mine over a year and a half and never had any problems.

[Coconut Water]

You can get a Target debit card. That's what I have. You give them a voided check and they link your Target debit card to your bank account. You get 5% off still and that way you're not spending borrowed money, you're just using money in your checking account. I've had mine over a year and a half and never had any problems.

I considered the debit card, but am not feeling confident about Target being able to charge up my checking - I probably wouldn't worry so much if not for the credit card breach months ago. I don't know too much about all of that, but I imagine Target has taken some steps to up their data security, but still…I think for now I am going to hold off on any Target cards…may revisit the concept when I start school.

[Maleficent999]

I considered the debit card, but am not feeling confident about Target being able to charge up my checking - I probably wouldn't worry so much if not for the credit card breach months ago. I don't know too much about all of that, but I imagine Target has taken some steps to up their data security, but still…I think for now I am going to hold off on any Target cards…may revisit the concept when I start school.

I had my card when that happened but I never had any security issues. I monitor my accounts daily. If I had to think of one thing to complain about it would be that even though you have a PIN and it's linked to your checking, the withdrawal isn't made immediately. For instance, if you make a purchase on Monday it probably won't post to your account until Wednesday. Like I said, I monitor my account so I know to make sure I have enough funds to cover my Target purchase but if you don't keep track I could see how someone might easily forget and then not have enough money when the transaction actually goes through.

[Chande]

I use it and just make sure to not buy things that I won't be able to pay off at the end of the month. Plus, if you're on any medications, you get a 5% off card for every 5 prescriptions you fill there and it stacks with the 5% of the RED card. It's been a huge help and I buy all of my groceries at the Super Target, so it really adds up.

[Coconut Water]

I use it and just make sure to not buy things that I won't be able to pay off at the end of the month. Plus, if you're on any medications, you get a 5% off card for every 5 prescriptions you fill there and it stacks with the 5% of the RED card. It's been a huge help and I buy all of my groceries at the Super Target, so it really adds up.

Huh, I actually thought pharmacy is excluded in the 5% off. 

[juilletmercredi]

Opening accounts doesn't hurt you - it's the hard inquiries on your credit report.  If you have too many in a limited period of time (and they're not connected to auto loans or mortgages), that can ding your credit - but only a bit, and they don't stay on long.

 

As for the card, you have to have self-control.  If you get a small limit and have self-control, you don't need to worry so much about the credit card.

 

5% really isn't that much, though.  Even if you spent $1,000 at Target, that's $50.  And given that the interest rate is likely to be around 20%, you're going to be repaying more than that $50 in fees and interest, unless you pay it all off immediately.  It doesn't sound worth it.

 

Personally, I would say get an all-purpose credit card - one that you can use anywhere.  Then teach yourself the self-control to only use it in emergencies or for travel before reimbursement (most travel funds reimburse you rather than pay up front).

 

Also, I apply online for credit and insurance and everything.  I have yet to be a victim of identity theft.  (Well, once - someone skimmed my debit card number, but that had nothing to do with my SSN or applying online.  I actually think it got skimmed off a dysfunctional MetroCard machine in the subway.)

[rising_star]

I pay all of my credit cards off in full each month, so I have no clue what the interest rates are on any of them. I basically just do the 5% Target Card to save money there since I'm already shopping there anyway. Similarly, I buy pretty much everything on one of three cashback/rewards cards I have in my wallet. I even use them to pay my rent currently, which is awesome for increasing your cashback. Obviously the rewards are only useful if you only buy what you need and pay off in full before you get hit with interest charges.

[Coconut Water]

 

5% really isn't that much, though.  Even if you spent $1,000 at Target, that's $50.  And given that the interest rate is likely to be around 20%, you're going to be repaying more than that $50 in fees and interest, unless you pay it all off immediately.  It doesn't sound worth it.

 

 

 

The card feels like high maintenance that I don't feel like worrying about, and it might encourage more spending than necessary, even if I am pretty strict about what I put in my shopping cart at the store. Conversely, even $50 is money that could go towards feeding myself and other essentials.

 

Even so, I am passing on the card for now.

Edited July 31, 2014 by Coconut Water

[Coconut Water]

I pay all of my credit cards off in full each month, so I have no clue what the interest rates are on any of them. I basically just do the 5% Target Card to save money there since I'm already shopping there anyway. Similarly, I buy pretty much everything on one of three cashback/rewards cards I have in my wallet. I even use them to pay my rent currently, which is awesome for increasing your cashback. Obviously the rewards are only useful if you only buy what you need and pay off in full before you get hit with interest charges.

This is exactly my thinking in getting the Target card - to save money and pay it off every month. However, I realize I need to simplify before even considering another card to manage. Your input - and everyone's here - has been really helpful! 

[reinhard]

You run the risk of losing it. Give your wallet some room. I think a Costco card is the furthest i will go for store cards.

[Ceci]

I have worked for a credit card company for almost three years... I recommend considering how often you actually shop at Target.  I toyed around with the idea of opening one, but changed my mind.  It depends on how many other cards you have... and always keep in mind when opening new lines of credit it can drop your FICO score when pulled.

 

 

 

Another option is their debit card with also gives you % back.

Edited July 31, 2014 by acarr

[themmases]

I used to work at Target and hated offering these to people-- they are not a good deal. Everyone thinks they will be the responsible person who always pays it off immediately, but stores don't offer these to be nice or even just to increase loyalty like a discount card. They offer them because they make a ton of money.

 

5% is less than sales tax in many areas, and 7 years ago when I worked there and the discount was 10%, the discount still wasn't worth that much. People would come through my line with the 10% coupon they'd saved for a major purchase like all new bedding, but the amount we knocked off their bill-- after they'd already spent $1000 at Target!-- was maybe enough to go to Applebee's if no one got an appetizer.

 

I would recommend that people just get a normal credit card with a standard rewards program or cash back that they can use anywhere, with an interest rate that actually reflects their credit standing. More consumer credit cards are starting to report credit score on your bill for free, which is really valuable information. My Discover card does this (also 5% on categories and 1% on everything else), and I'm really happy with it. I just used my accumulated cash back as a direct payment method on Amazon, which was kind of cool too.