Target Red Card is Better Than You Think

Everyone knows Target as a reliable source for reasonable prices, without going to the ultra-cheap Walmart status.

Most people are also reasonably familiar with Target’s Red Card. A quick recap from their site lists the benefits of:

  • 5% off everything.
  • Free delivery of most items.
  • Extended return times.

To me, this alone was convincing enough to signup. Target served as a good one-stop shop for a lot of family stuff, plus the delivery was enticing. I also use Amazon, but Target’s return policy is favorable of having to repack and ship something back to a vendor in hopes of getting a refund.

However, another advantage emerged, that I strangely discovered while researching tips for taking my kids to Disneyland.  The 5% also applies to… Gift Cards. This really shocked me, as I’ve used gift cards before as a vehicle to wrack up points or cash in on rebates, and it seems like these are always guarded by the store manager as cash only sales, and no discounts, or anything. Yet Target seems quite comfortable giving you a 5% gift cards, no limits.

The gift cards vary by store and there are quite a few, but in addition to Disney the ones that interest me are: Southwest, Chipotle, Subway, Ebay, Starbucks, Flemings and Netflix.

I fly Southwest pretty frequently so that savings is most rewarding. Southwest does have a pretty decent return on their Chase Credit card, but by my calculation it’s about 3.4% when booking travel with them. That’s not bad, but compare that to immediate cash savings, and I’d prefer the gift cards.

The only Red Card limitation is that the 5% can’t be applied towards a Visa or credit card prepaid card, nor can it be applied to a Target Gift card. Additionally, if you try to outmaneuver Target by paying for part of it with your credit card (hoping to get points), and part red card, the discount only applies to the Red Card amount (I only tested this out of technical curiosity as it was a hassle to actually execute).

So keep that in mind if you’re considering taking a Southwest flight Disneyland, with eating plans including Subway, Chipotle, Starbucks and Olive Garden…