A while back, we had a huge shopping trip at Target.  It was a double whammy of buying nursery furniture, coats, some electronics, and so on.  In the end, our bill was around $450.  At this point the cashier offered us 10% off if we applied for a Target Visa Credit Card.

They also offer a Target Red Card Debit Card. If you don’t want or need another credit card, the debit card offers a 5 percent rebate on everything you buy, which isn’t big money, but it is also totally free.

Usually, I advise against taking stores up on their 10% off offers for two primary reasons.  Number one, you don’t need 20 credit cards and even if you plan to cancel it, it always takes time and effort and most people put it off for far too long.  Second, even if you did effectively manage various 10% off offers, the card is only good at one store and often comes with a horrendous interest rate which makes it a very inefficient way to get what is basically a 10% off coupon.

Target Credit Card Review

We live near the city and while there is a shopping mall close by, the Target is our only big box department store retailer, so we go there a lot.  Which means we would actually get a fair amount of use out of our card at its primary location, thus increasing our rewards.

One of the biggest bonuses for us getting a Target Card is that it changes the returns and exchange policies as well. If you use a Target Card (either credit or debit) for your purchase, then your money back refund window increases to 90 days. Now, I probably don’t need 90 days, but I can drift past 30 days if I’m busy with other stuff. Even better, the transaction is recorded for you, so you don’t need the receipt either. This feature is GOLD when you have kids and they need stuff (especially clothes or shoes) but you aren’t 100% sure if it is going to end up working out. Now, you just buy it, and once you get it home, if you don’t like it, you can always return it, easily, without a receipt, and anytime during the next few months.

The Target Visa credit card is a full Visa credit card which means we can use it at other places besides just Target.

This isn’t just some one time percent off coupon.  With the Target RED card, you get a 10% off coupon every time you earn 1,000 points.  You get 1 point per $1 spent anywhere and 2 points per $1 spent at Target or $500 of spending to get 10% off.

At a store like Target, you can hold off on big purchases and then get them when you have 10% off.  Do that on a $300 shopping trip and you’ll save $30.  A $30 savings for $1,000 worth of spending at Target works out to 6% cash back!  Not bad for a department store card.

And finally, the interest rate on the card is PRIME + 4.99%.  This is not a great deal, but it isn’t a gouging interest rate either.  Since we pay off all of our credit cards each month, the interest rate is kind of moot, but I believe that it offers an insight into how a company views its customers.

A card offering a 21.99% fixed interest rate says, we see our customers as cash piñatas and don’t expect us to ever come through for you in terms of service or fairness.  PRIME + 4.99% says, this isn’t a great deal or anything, but it is more or less the going interest rate.  This says to me that they consider the card a way to help me shop at their store, and not a money making machine.  I’m OK with this.

If you are going to entertain these types of offers, however, here are the rules for successful store credit card offer management.

Smart Rules for Store Credit Card Offers With Percent Off Deals

1. Must be from a store you use consistently.
2. Must be usable at more than just that one store.  (Exception for stores you shop at more often than anywhere else.)
3. Must have reasonable interest rate.  Anything over 18% fixed interest rate is unacceptable.  PRIME + 5% or lower is the max for variable interest rates.
4. Must have additional value (rewards, free gift cards, big coupons).  No matter how good the rate or how often you shop at the store, there is no reason to get a credit card just to save 10% once.  The only possible exception to this is something like a Home Depot card when you are buying a whole household full of appliances.

 

We’ll visit this topic more in the coming weeks.  Get our PERSONAL FINANCE RSS FEED to ensure you don’t miss out.