To get your maximum Daily Cash you’ll want to use Apple Pay at checkout. Apple Pay will allow 2% of the purchase in Daily Cash. Using the chip or swiping only pays 1% Daily Cash. Select merchants offer 3% Daily Cash.
Apple Card is a Mastercard and is accepted at merchants worldwide that accept Mastercard. Apple Pay is available at merchants that offer Tap-To-Pay or Apple Pay. Target does indeed offer Apple Pay.
Please review the support articles linked below.
Apple Card - Features - Apple
Make purchases using Apple Pay - Apple Support
Wallet - Apple