For one reason or another, I’ve been getting a number of emails looking for my opinion on the Walmart credit card. Generally, I prefer credit card rewards to be flexible, like a cash back credit card, rather than being locked into a single vendor.
However, there are some vendors that offer good value, like Loblaws and their World Mastercard which offers a 2% return when using the card in their stores. Or Shoppers Drug Mart and their Optimum Points which can offer value when used in conjunction with 20X the points days.
Needless to say, there is a lot of competition in the credit card landscape. Lets see how the Walmart credit card stacks up.
So what exactly does this credit card offer?
- No Annual Fee;
- $25 in bonus Walmart Rewards when using your card for the first time (must go paperless too);
- 1.25% of your purchases in Walmart towards Walmart Rewards;
- 1% of all other purchases towards Walmart Rewards;
- Redeem rewards instantly at a Walmart cash register in $5 increments.
Basically if you spend $100 at Walmart, you’ll get $1.25 towards a future Walmart purchase. When making purchases elsewhere, you’ll get 1% towards a future Walmart purchase. In essence, it’s a cash back card but the card holder is locked into spending at Walmart. It’s not a bad system for die hard Walmart shoppers.
Ah the drawbacks, and there are a couple. In addition to being locked into spending your credit card rewards at Walmart, one big surprise is that this credit card lacks an insurance package. Most decent free credit cards will at least offer purchase theft assurance and extended warranty. Actually, they do offer extended warranty – but at a cost of $3.99/month (seriously?).
To summarize, the Walmart credit card is a 1% cash back card that jumps to 1.25% cash back on in-store purchases. The catch is that the rewards must be spent in a Walmart and no insurance coverage is offered. While it’s great that this card has no annual fee and offers value to dedicated Walmart shoppers, there are other free credit cards that are much more competitive.
For example, some may argue that this card is better than the Smart Cash card since the 2% for gas and groceries cannot be earned for groceries at Walmart. So Walmart card users will get 1.25% cash back on their groceries vs 1% on the Smart Cash Card. This is a valid argument against the Smart cash card, but when you combine the fact that Smart Cash users will get 2% back on gasoline and any other grocery shopping (up to $400/month), and the decent insurance package (price protection, purchase assurance, car rental insurance, and extended warranty), the Smart Cash is still offers more value.
Another example is the Capital One Aspire Cash Platinum card. This free capital one card will give you 1.25% cash back on all spending, in addition to a strong insurance package (price protection, purchase assurance, car rental insurance, baggage delay and extended warranty). This is an easy pick over the Walmart card.
Overall, the Walmart card can offer value to exclusive Walmart shoppers, but there are better free credit cards out there.