If you are a regular shopper of Walmart, you’ve probably also seen their ads plastered in the store for the Walmart Credit Card.
Walmart offers two types of credit cards: the Walmart MasterCard offered by Synchrony Bank, which can be used wherever MasterCard credit cards are accepted; and the Walmart Credit Card, which can only be used at Walmart stores, Walmart Supercenters, Walmart Neighborhood Markets, Walmart.com, Walmart and Murphy USA gas stations, and Sam’s Clubs.
For heavy Walmart shoppers who can pay their balance in full each month, either card’s rewards might be sweet enough to justify signing up. Neither has an annual fee, and you’ll earn cash back in Walmart stores (3%). The regular Walmart Credit Card, however, can be especially appealing to those with low or fair credit scores who have trouble getting approved for other credit cards. In that case, the Walmart credit card can be a useful way to build credit, so long as you spend carefully and pay your bill in full each month.
But before you apply for a Walmart MasterCard or Walmart Credit Card, there are a few things you should be aware of as the Walmart Credit Card may not necessarily be the best choice for your spending habits.
Promotional Offers and Rewards
Dangling a sign-up bonus is a clever way to entice shoppers to sign up for the credit card at checkout. But given how high retail credit card interest rates can be, it’s never a good idea to sign up for a card because of the sign-up reward alone. The Walmart MasterCard and Walmart Credit Card are not exceptions. Unless you’re able to use and pay off your card in full each month, the cards’ painfully high interest rates (we’ll get to that later in this review) can easily eat away at any tangible cash back or sign-up bonus offers.
Walmart offers different promotional offers for cardholders and new accounts throughout the year.
Weak Sign-up Bonus
Currently, Walmart is offering a one-time 10% discount on purchases if you are a new cardholder. Before you get too excited, there’s a caveat: it’s only good on purchases up to $250 because there’s a $25 limit on the discount. It may also be confusing to new cardholders as it says “10% discount,” but you don’t actually get a discount at the register. Instead, it’s applied later as a statement credit.
To take advantage of this discount, you must make a purchase on the same day you are approved for your new credit card. The discount cannot be used for cash advances, gift cards, money orders, or gas purchases.
If you don’t receive immediate approval at a kiosk or online at Walmart.com, but are later approved after the company does more research into your credit history, you will receive a 10% certificate in the mail with your new credit card package. This offer is valid until April 30, 2017.
3-2-1 Save Rewards Program
The 3-2-1 Save Rewards Program allows you to save 3% on Walmart.com purchases, 2% at Murphy USA and Walmart gas stations, and 1% at Walmart and anywhere your card is accepted if you are Walmart MasterCard holder.
If you’re a heavy Walmart shopper, their 3-2-1 rewards program might be just tantalizing enough to justify signing up for their credit cards. There really isn’t another credit card on the market that can get you a 3% return at Walmart; however, there are certainly other cash back credit cards for people who shop at a range of supermarkets looking for a wider range of benefits.
The American Express Blue Cash Everyday Card, for example, has no annual fee and gets you 3% cash back at all supermarkets. However, if you do your grocery shopping at a store like Walmart or Target that is not specifically a stand-alone supermarket, you will only early 1% cash back. You also get 2% back on gas and 1% on everything else. So if you’re not a heavy Walmart shopper, the Blue Cash Everyday Card may be a better idea.
Walmart Credit Card and Walmart MasterCard holders are automatically enrolled in Walmart’s 3-2-1 Save Rewards Program. Walmart Business and Community accounts are not eligible.
You are eligible to earn these rewards as long as your account is open and in good standing, and there are no limits on the rewards that can be earned. Rewards never expire, and you can check your balance by logging in to your account here.
These savings are paid as a statement credit each month on net purchases after adjusting for any possible returns. Cash advances, quick cash advances, fees, and interest do not qualify for these savings rewards. Unfortunately, these benefits also cannot be stacked with the 10% discount for the first purchase for new cardholders.
The Fine Print
The Walmart Credit Card and Walmart MasterCard do not have an annual fee. However, the interest rate on the Walmart Credit Card is where it gets scary. The current APR is 23.15% based on the prime rate plus 19.65% and is subject to change as the prime rate fluctuates. The Walmart MasterCard interest rates range from 17.15% to 23.15%, depending on your creditworthiness.
You can avoid paying interest on your charges by paying your entire balance in full every month. Your due date will be at least 23 days after the close of each billing cycle.
Other fees are fairly standard. Late payment fees are up to $37. There is a foreign transaction fee of 3% on the Walmart MasterCard, which means you definitely don’t want to rely on this card overseas. Cash advances for the same card cost $5 or 3%, whichever is greater. The interest rate for cash advances ranges from 20.15% to 26.15%.
Applying for the Walmart Credit Card
You can apply for a Walmart Credit Card or Walmart MasterCard at any Walmart store register or jewelry kiosk, or online at Walmart.com. When you choose to apply, Synchrony Bank will pull your credit score and look at other factors, like your income level, debt level, employment, and more.
Applying for the Walmart Credit Card is pretty simple, and most of the time you can get an instant answer. But like any other credit card application, applying for a new card does require a hard pull on your credit, which will ding your credit score.
There is no preset credit score requirement listed to qualify. But many cardholders report qualifying for this credit card with a low credit score. The high interest rate is also an indicator that those who are working to build credit may qualify.
Applying in-store and being approved means you will receive a Temporary Shopping Pass that is only good for 24 hours in that particular Walmart store location.
Pros and Cons
Pro: There’s no annual fee to worry about.
Con: A high interest rate. Carrying a balance on your account will quickly outweigh the savings benefits of this credit card.
Pro: No cap on regular rewards. You can earn as many rewards as you want for your purchases.
Con: Rewards cannot be stacked with other offers, like the 10% discount for new cardholders.
Pro: Those with low credit may be able to qualify and use this card for everyday purchases to help improve their credit score.
Con: Because there are so many stores and so many items, having a Walmart Credit Card could be a nasty temptation if you don’t have a handle on your finances.
Other Rewards Cards
The Walmart Credit Card limits you to purchases only at Walmart stores, Walmart Supercenters, Walmart Neighborhood Markets, Walmart.com, Walmart and Murphy USA gas stations, and Sam’s Clubs. This is why store cards may not be the best choice if you are looking to earn rewards. But even if you qualify for the Walmart MasterCard so you can use it to save on purchases at locations other than Walmart, there are still better rewards credit cards available.
Citi Double Cash – With the Citi Double Cash card, you’ll earn 1% cash back on purchases, just like the Walmart MasterCard. But with this card, you’ll get another 1% cash back when you pay off your credit card statement. Plus, the Citi Double Cash card has no annual fee. But, you can use this card to earn rewards at superstores and warehouse stores like Walmart and Target.
Discover it – With the Discover it credit card, you can earn 5% cash back in rotating categories each quarter like gas stations, Amazon.com, restaurants, wholesale clubs and more, up to the quarterly maximum (which is $1,500 of purchases) each time you activate. All other purchases get 1% cash back. Also, you can get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year (only for new cardmembers).
American Express Blue Cash Everyday Card: The American Express Blue Cash Everyday Card, for example, has no annual fee and gets you 3% cash back at U.S. supermarkets, up to $6,000 per year. However, if you do your grocery shopping at a store like Walmart or Target that is not specifically a stand-alone supermarket, you will only early 1% cash back. You also get 2% back at U.S. gas stations and 1% on everything else. If you’re not a heavy Walmart shopper, the Blue Cash Everyday Card may be a better idea.
Who Will Benefit Most from the Walmart Credit Card?
While store cards are not usually a good idea for staying on budget, the Walmart Credit Card can be used for things like groceries and household necessities. The card may also be good for someone who is looking to rebuild their credit and can’t qualify for other credit cards as the required credit score to qualify for a Walmart Credit Card is typically low, although a specific score needed is not stated on their website.
On the other hand, it’s worth being cautious if you decide to apply for the Walmart Credit Card. With its high interest rate, carrying a balance will do more harm than good.