Buzz
Next week, Walmart will release two new credit cards, both offering impressive rewards for dedicated shoppers. However, the competitive nature of the cash-back credit card market, along with one major limitation in Walmart’s reward system, makes it a mediocre option if you’re planning to apply for a new card before the holiday shopping rush.
Card Perks
The Capital One Walmart Rewards Mastercard gives 2% cash back on dining and travel expenses, and 1% on all other purchases. Both this card and the Walmart Rewards Card (which can only be used for Walmart purchases) provide these cash-back benefits.
5% cash back on purchases at Walmart.com, including Walmart Grocery Pickup and Delivery services.
5% cash back on in-store purchases made with Walmart Pay within the first 12 months after card approval as a limited-time introductory offer.
2% cash back on in-store Walmart purchases once the introductory offer expires.
You can redeem your earned rewards for travel, gift cards, statement credits, or use them during online checkout for Walmart purchases. There is no limit to how much you can earn each year.
If you frequently shop on Walmart.com or use their grocery services, the 5% back is a great deal. Both Amazon and Target offer 5% back on their premium credit cards, though Target’s Redcard describes it as a 5% savings rather than cash back.
However, Target allows you to earn the 5% back for in-store purchases, and the Amazon Prime Rewards card extends its 5% back to Whole Foods. Walmart's 5% cash back on in-store purchases is only valid for the first year, after which it drops to 2%.
If you're an existing Walmart cardholder, you can continue using your current card until the new ones arrive. The updated rewards system will be available for everyone starting October 11. Interest rates on the Mastercard range from 17.99% to 26.99%, while the store-only card carries an interest rate of 26.99%.
Are these new cards actually worth it?
Walmart’s new credit cards offer notable improvements compared to the older versions, and if you're already a Walmart cardholder, you'll be automatically upgraded. According to Sara Rathner from Nerdwallet, “The previous Walmart card issued by Synchrony Bank only gave 3% back on Walmart.com and a meager 1% on in-store purchases,” adding, “The new card is a major upgrade.”
However, if 5% cash-back is becoming the norm for credit cards (and it certainly seems to be heading that way, though slowly), one year of maximum in-store earning potential just doesn’t seem impressive enough. You could instead use a cash-back card not tied to a specific retailer, one that offers rotating bonus categories. If you already have a card that provides 3% cash-back, getting the Capital One Walmart card may not be worth it.
Of course, there’s an exception. If you’re planning your holiday shopping carefully this year, the new Walmart card could be useful. You can split your shopping between Walmart.com and their physical stores to maximize convenience, earn 5% cash back on both, and use the rewards for other small items you need at Walmart after the holiday rush. (There are always those little things—mostly batteries for the kids’ toys.) After the first-year promotion ends, just put the card away and use it only for Walmart online orders.
