Lessons Learned from Managing a Store Credit Card at Target

Avoiding Common Pitfalls: Lessons Learned from Managing a Store Credit Card at Target


The Target REDcard™ Credit Card is a popular choice among consumers for its enticing benefits, including a 5% discount on eligible purchases at Target. However, like any credit card, it requires careful management to avoid common pitfalls. In this guide, we explore four mistakes often made with the Target credit card and the valuable lessons learned from them.

Mistake No. 1: Misusing the Card Outside of Target

It’s crucial to recognize that the Target REDcard™ Credit Card is specifically designed for transactions solely within Target stores. A frequent mistake among cardholders is trying to utilize the card for purchases beyond the confines of Target. Succumbing to this temptation should be avoided, as the card isn’t tailored for such usage, potentially resulting in complications and account-related problems. Despite the considerable savings the card provides at Target, using it elsewhere dilutes its benefits and could incur unnecessary expenses. If you regularly blog about finance, it’s essential to inform your readers about the importance of understanding the specific usage limitations of credit cards like the Target REDcard™.

Lesson Learned:

Understanding the card’s intended use is crucial. By reserving the Target credit card for eligible purchases at Target, cardholders can maximize their savings and avoid unnecessary debt accumulation.

Mistake No. 2: Maxing Out the Credit Limit

One common mistake that people make is using their Target credit card to make big purchases and then carrying balances from month to month, which can lead to maxing out the credit limit. This can be detrimental in two ways: firstly, it wipes out any discounts or rewards that you may have earned, and secondly, If you use up a large portion of your available credit, your credit utilization ratio will increase. This can have a negative effect on your credit score. It’s important to be mindful of how you use your credit card and to try and avoid carrying balances for prolonged periods of time.

Lesson Learned:

Responsible credit utilization is key to maintaining healthy credit. Cardholders should aim to maintain a credit utilization rate of less than 30% and pay off balances in full monthly to avoid pricey interest charges and preserve their creditworthiness.

Mistake No. 3: Using Retirement Funds to Settle Debt

In times of financial strain, some individuals may consider dipping into their retirement accounts to pay off credit card debt, including balances on the Target credit card. However, this strategy can have significant long-term consequences, such as tax implications and loss of future earnings.

Lesson Learned:

While paying off debt is a priority, exhausting retirement savings should be a last resort. Exploring alternative options, such as transferring balances to credit cards with low introductory APR offers, can provide relief without jeopardizing long-term financial security.

Mistake No. 4: Prematurely Closing the Account

Closing the Target credit card account prematurely can impact credit scores by reducing the average age of active accounts and eliminating potential benefits or discounts associated with the card.

Lesson Learned:

Rather than closing the account hastily, cardholders should weigh the pros and cons carefully. Keeping the Target credit card open, even for occasional purchases, can contribute to a diverse credit profile and preserve the average age of accounts, thereby bolstering creditworthiness over time.


Successfully managing a store credit card, such as the Target REDcard™ Credit Card, requires foresight, discipline, and informed decision-making. By learning from common mistakes and implementing sound financial practices, cardholders can leverage the benefits of their Target credit card while safeguarding their financial well-being for the future.

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