New Walmart Credit Card Can Only Be Used for 12 Months
Walmart is launching two new credit cards next week, both promising big rewards for the retailer’s fans. But the money-back credit card industry is very competitive right now, and one big problem with Walmart’s rewards program makes it not the best choice if you’re planning to open a new card before holiday shopping season.
Benefits of cards
Capital One Walmart Rewards Mastercard offers 2% cashback at restaurants and travel and 1% cashback elsewhere. The Walmart Rewards card and card (which can only be used to shop at Walmart) offers the following refundable rewards:
- 5% refund on Walmart.com purchases, including pickup and delivery of Walmart groceries.
- A 5% refund on in-store purchases using Walmart Pay within the first 12 months of approval as a special introductory offer.
- 2% refund on non-pre-offer Walmart purchases.
You can redeem your rewards for travel, gift cards, credits on your statement, or during online checkout at Walmart. There is no annual limit on how much you can earn.
If you shop frequently at Walmart.com or use one of its grocery services, then a 5% return is great. Amazon and Target offer 5% on their top tier credit cards, although Target Redcard describes this as saving 5% instead of returning them.
But Target allows you to earn that 5% when you shop in the store, and the Amazon Prime Rewards card extends its 5% back to Whole Foods purchases. Walmart’s 5% refund on in-store purchases only lasts for the first year you have the card, then only 2% is refunded.
If you’re already a Walmart cardholder, you can continue to use your card until new cards are mailed and the new reward system kicks off for everyone on October 11th. Interest rates for Mastercard will range from 17.99% to 26.99%, while for a store-only card there will be an interest rate of 26.99%.
Are the new cards worth?
The new Walmart cards are an improvement over the previous ones, and if you already have a Walmart credit card, you will automatically be upgraded to the new type. “The previous Walmart card issued by Synchrony Bank only offered a 3% return on Walmart.com and a paltry 1% back in store,” Sara Ratner of Nerdwallet said in an email statement. “Thus, the new card is a huge step forward. “
But if 5% is becoming the standard for cash back credit cards (and we’re definitely moving in that direction, albeit gradually), one year of maximum potential in-store profit isn’t enough to impress me. Instead, you can use a refund card that is not tied to a specific store and offers an alternating bonus category. If you have a card that already allows you to earn 3% cashback, it probably isn’t worth purchasing a Capital One Walmart card as your next credit card.
So, there are always exceptions. If you’re strategizing your vacation shopping this year, that’s when a new Walmart card might come in handy. Split your purchases between online and Walmart stores for ultimate convenience, get 5% back on both, then redeem small rewards at Walmart after the holiday season. (There is always disagreement. Mostly batteries for toys.) After the first year of the promotion, leave the card at home and use it only when ordering from Walmart online.