Target Redcard: How does $72,000 in manufactured spending every year sound?

Published February 24, 2015   Posted in How to Think

Audio introduction

For the moment, Target is home to one of the most profoundly good deals in our economy.  Target’s no-annual-fee Prepaid Redcard lets customers load funds onto what they call their “Redcard”, which is used just like a regular credit card and is accepted anywhere that American Express is.

Note: Several sites (like this one) are reporting that the credit card load capability of the Target Redcard is no longer supported; it was only a matter of time.  More information here.

Target REDcardsThe profound element of this deal is Target lets you load funds onto their prepaid Redcard with a credit card.

Ah…I can see the wheels turning in your head already.  For those of you who credit card hack, you’ll immediately realize the potential with this deal.  But for those who haven’t yet delved into the wonderful world of rewards cards, check out this blog post about how it all works.

For the record, my wife and I are going to escape the sweltering Tucson heat this summer with a trip to Glacier National Park in Montana, and we’re flying up there for $11.20 a piece – all due to credit card hacking.

Don’t confuse these Target Redcards

First, a word of caution if you want to take advantage of this deal.  We are talking about the prepaid Target Redcard that acts as a credit card.  Target also has another card by the same name that acts just like a debit card.  We want the credit card, not the debit card.

Also, American Express offers a couple other prepaid credit card options, like the Serve and Bluebird credit cards.  I believe American Express will only allow individual customers to have one.  If you already have one of these and want to switch to the Target Redcard, you will probably need to cancel your current prepaid card.  Call American Express for confirmation before canceling, though.

What does the Target Redcard get you?

The Redcard gets customers a few purchase-related niceties like 5% off all Target purchases (in store and online), free shipping with online buys and an additional 30 days to return the stuff that you buy.

Okay, these are cool…but, there’s also something else that represents a much more kick ass benefit to this card – you can use the Redcard to pay off things like your mortgage or rent…or even other credit cards.  This is a type of manufactured spending.  Depending on the size of your mortgage, one could put the entire yearly cost of the mortgage on the credit card (or combination of credit cards) that get the most rewards points through the clever use of the Redcard.

But wait, there is more.  In addition to using the card for large payments like mortgages, link your bank account to your Redcard and transfer any amount from your card right back over into your bank.

The options are plenty with the Redcard.

You can also withdraw cash from your Redcard at certain ATMs around the country (any ATM inside a Target store and any US Allpoint network ATM) instead.

Why only $72,000 in manufactured spending?

Because there’s a limit to the amount of money that you can put on the Redcard by credit card in a month, and that limit is $5,000.

In fact, there are a few different credit card limits.

  • $5,000 monthly load limit
  • $2,500 daily load limit
  • $1,000 per load limit

In addition to the credit card load, the Target Redcard can be loaded with up to $1,000 through the use of a debit card, and if you use a card with rewards (like the Suntrust Delta debit card), that’s an additional $12,000 a year in spending potential).

And so, doing the math, if the card is loaded up with the maximum $6,000 a month for the duration of the year, the total yearly amount that can be loaded onto the Redcard by a credit card is $72,000.

Damn, not too shabby.  This represents an additional $72,000 in credit card rewards purchasing every year.  Whether you’re using it to pay off your mortgage or simply transferring right back into your bank account, this Target Redcard is a kick ass deal to completely maximize your credit card reward points potential.

How do I get one?

These prepaid cards can only be obtained at a Target store, and unfortunately, not all Target stores offer the Redcard.  Call your local Target or use this utility to make sure your store offers the Redcard before using the gas to make the trip.

I had to show my drivers license when I picked up my card, so be prepared for that.  Also, the cards that you buy in the store are considered temporary.  Once you complete your registration online, you will be sent your permanent card in the mail and can activate it only once you receive it (Target calls the new card a “Personalized Card” – hat tip to the marketing genius who came up with that bit).

Technically, you don’t need to register online for a permanent card.  However, the temporary card has more restrictive load limits, which will reduce the amount of money that can be spent to reload the card.  There is a $500 initial load limit when initially getting the card at a Target store and a $1,500 total load limit for the card.

There is no fee to get the card.  There are no annual fees to keep the card and there are no fees to load the card with money.  Just a bunch of fee-less advantages, really.

If your local Target offers the Redcard, do yourself a favor and pick one up and start using it.  Maximize those credit card rewards, baby!

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12 responses to “Target Redcard: How does $72,000 in manufactured spending every year sound?”

  1. Interesting use of the Red Card here…never even though of that!

    I guess one more advantage would be that it is pre-paid, so when their data gets compromised your regular cards are safe =P. I’m still enjoying their year of free identity theft monitoring (along with several others).

    Out of curiosity, how would you pay a mortgage with one of these. IIRC most lenders (including my own) don’t accept credit cards for payment.

  2. This is very interesting and my brain sure is churning.

    Brian, if you follow the link above you will see that it offers a free bill pay service.

    Steve, When I click through to the link it says you can add money to the card in the following ways:

    Direct Deposit
    Cash Reload at all US Target store locations
    Checking or Savings Account
    Debit Card

    Are you sure you can still load it with a credit card? Or maybe they removed this feature.


    • Hey Gen Y!

      Actually, Target doesn’t advertise the fact that you can fill the Redcard via a credit card – only that cash can be loaded in-store. However, if you walk up to one of the registers with your Redcard, they do currently accept payment via a credit card.

      That said, I DO expect this loophole to get closed at some point in the future – perhaps after they roll out the Redcard nationwide, but of course, that is completely speculation. But for the time being, credit cards are accepted in-store.

      It’s a great way to manufacture spend. 🙂

  3. NoonRadar says:

    Indeed the REDcard (aka Redbird) is as of now the King of MS (manufactured spending)!

    I have been using this extensively for the past 3 months, and also provided it online for people who don’t have it at their local Target store (since it’s still on a testing market basis, but can be used nationwide). Here’s a few things to point out about it:

    – You can only have one permanent registered card/acct per person, however that also means that anyone in your family over 18 can have one, since there’s no credit check that applies.

    – If you have a similar prepaid American Express account in your name, namely Serve or Bbluebird, you can’t register for the REDcard online until you cancel Serve/Bluebird.

    – You can bill-pay anyone via REDcard, companies or individuals; they will mail a check if they can’t send the payment electronically (not a good idea to billpay yourself though).

    – You can technically unload (use/drain) the entire $5K monthly credit card load (pay) limit to your checking account and/or cash via ATM, however IT IS NOT recommended; it’s suggested to keep these kind of activities to a minimum, or REDcard (and perhaps the credit card companies) might limit/close your account for not using it as intended.

    — For bonus/points/miles/cashback purposes you don’t need to do this; just pay the credit card bills or other bills, though try not to do a closed loop, i.e. don’t pay the same credit card with which you loaded the REDcard account.

    – You don’t have to live in an area where the temporary activated REDcard can be obtained in order for you to have a permanent REDcard account; you can have someone send you a picture of an activated temporary REDcard (you register online with the card numbers) or obtain one online…many people provide them online for a fee (for their service), including myself.

    • Ed says:

      Thanks for the info NoonRadar, my statewide Targets do not offer the RedCard here yet, but I am travelling to Colorado for a wedding, where it is offered. It sounds like I can stop by a Target there and pick one up and bring it back to my hometown.

      I am interested in using it to bill pay my mortgage and utilities that won’t take a credit card (without an extra fee, which defeats the purpose). Cool beans!

      • Ed says:

        I was reading a bit closer, it looks like I would have to go into a Target on a regular basis to load the card via a credit card? Is this correct? It would be nice if it could be linked online from my CC to the RedCard.

        Is there a concern for the credit card being used is an AMEX card and the RedCard is through AMEX? It notes that debit cards have to be Visa or MC branded…..

        • NoonRadar says:

          You can load it Redbird at Target with up to $2.5K a day (except a couple of stores in NYC) but yes, you can only load it with a credit card at a Target store. There’s no online credit card loading with Redbird, there is a $1K/month debit cad loading online, in addition to the credit card loading at the store, which itself falls under cash loading (believe it or not).

          I wrote a REDcard (Redbird) FAQ post a couple of days ago, take a look for other such general questions:

        • Ed,

          Yes, if you’re using a credit card to load up your Target Redcard, you MUST do it at one of your local Target stores at the cash register (or at customer service, either one).

          I am not aware of any stipulation regarding the type of credit card that you use to load up the Redcard. I don’t have an AMEX credit card either, so…

          I would be highly surprised if you couldn’t use your AMEX card to load up your Target Redcard.

  4. D says:

    How did you come up with $72,000/yr manufactured spending when you can only spend $5,000/month. Wouldn’t that only be $60,000 a year? How do you spend the other $12,000/yr??? Am I missing something here?

    • D,

      Good catch, I wasn’t clear in the article where the additional $12,000 comes from. The card can also be loaded with up to $1,000 from debit cards, and if you use a debit card that offers rewards, (like the Suntrust Delta debit card), this counts as a part of your manufactured spending potential.

      I will add this to the article so the math will appear to actually add up.

      Thanks for the note.

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