Walmart Credit Card Review

Walmart, the retail giant whose effects on the global economy and labor rights will be debated for decades to come, offers two credit cards. The simplest and easiest to obtain of the two is the Walmart Credit Card.

The Walmart Credit Card is accepted only at the following places: Walmart (in-store), Walmart.com, Walmart and Murphy USA gas stations, and Sam’s Club stores.

The card comes with a very modest and time-sensitive signup bonus: earn $25 as a statement credit when you spend $75 the same day you open your account. Any spending that’s done the following day will not count.

The card’s primary selling point is the low barrier to entry (only poor to fair credit is required) and the cash back reward program, which is structured as follows:

• Earn 3% cash back on purchases made at Walmart.com including Grocery Pickup
• Earn 2% cash back on Murphy USA & Walmart fuel
• Earn 1% cash back on all purchases from everywhere else the card is accepted (Walmart [in-store] and Sam’s Club stores)

Cash back rewards are paid as a statement credit.

Is the Walmart Credit Card a good deal for frequent Walmart shoppers or just a cynical attempt by the world’s most profitable company to soak its low-income customers with high-interest fees? Read on to find out!

Walmart Credit Card At A Glance

Eligibility

You’ll need poor to fair credit to qualify for the Walmart Credit Card.

When you apply for a Walmart credit card online or in-store, Walmart evaluates your credit history to see which of their two credit cards you qualify for. If your credit score is on the higher side, you will probably be offered the Walmart Mastercard, a separate, more versatile credit card that can be used anywhere Mastercard is accepted. Applicants with lower credit scores will be offered the Walmart Credit Card instead (if they are offered a credit card at all).

Rewards & Fees

• The $25 bonus offer is only good if you spend $75 with the card on the same day you open your account
• 25.15% variable APR on purchases and quick cash advances
• No annual fee
• Late payment fees run up to $38
• 3% cash back on purchases made at Walmart.com including Grocery Pickup
• 2% cash back on Murphy USA & Walmart fuel
• 1% cash back on all other purchases

One curious thing you’ll notice about the Walmart Credit Card is that it doesn’t particularly reward shopping at Walmart stores. Instead, the card only rewards purchases made online at Walmart.com (including Grocery Pickup) with the highest cash back rate of 3%.

You’ll also earn 2% cash back on gas when you fill up at Murphy USA and Walmart gas stations. Beyond that, you’ll earn 1% cash back on all other purchases. Of course, “all other purchases” equates only to purchases at Walmart and Sam’s Club stores as those are the only other places that accept the Walmart Credit Card as payment.

Note that the card carries a high APR (variable, currently 25.15%) and high late payment fees (up to $38). You won’t want to carry a significant balance from month-to-month. Of course, because this card’s target demographic is low-income Walmart customers who need some credit to finance their Walmart purchases and who might otherwise struggle to gain access to credit, a big chunk of card users will be carrying a balance from month-to-month. After all, if these customers could just as easily afford their Walmart-related purchases up front, they wouldn’t need this card.

When you weigh the pros and cons of the Walmart Credit Card, you realize that the card carries most of the disadvantages of a credit card for people with poor credit but fewer of the advantages. Frankly, most people with poor credit would be better served by getting a credit card that is accepted everywhere and which offers better rewards.

Another aspect of the Walmart Credit Card to consider: your credit limit may be as low as $150 to start. What’s more, many cardholders report having their credit limit lowered without any warning or explanation.

Redeeming Rewards

Rewards are redeemed as cash back in the form of statement credits.

Benefits

The Walmart Credit Card comes with a few benefits:

• $0 fraud liability
• Free access to your FICO score
• Quick Cash — Get up to $100 Quick Cash in $20 increments when you make a purchase with your Walmart Credit Card at Walmart-owned registers in Walmart stores, limit one per day
• Special financing offers throughout the year

Now, when you see this last “benefit,” you might think “Special financing offers? That sounds nice.” — but beware!

These offers may come in the form of a “deferred interest” financing deal. With deferred interest, you pay no interest on a purchase so long as you pay off the purchase in full before the end of the specified time frame. If you don’t pay off the purchase in this time frame, you’ll be retroactively hit with all the interest charges you would have been charged had the “no interest” deal never existed.

Deferred interest financing is inherently predatory as it can extract large interest payments from the very people who are the least well-positioned to absorb the hit. One would think the most profitable corporation on the planet wouldn’t need to resort to this practice. For more details on the dangers of deferred interest financing, check out our article on the subject.

Walmart may occasionally offer cardholders other “special financing” deals at certain stores which offer a true 0% intro APR period. If you decide to take Walmart up on one of these special financing offers, make sure it’s a true 0% intro APR offer and not a deferred interest offer.

Be warned: Any purchases made with special financing deals won’t be eligible for rewards.

Walmart Credit Card VS Chase Freedom Unlimited

A card like Chase’s Freedom Unlimited card, besides being a general-use card accepted anywhere Visa is accepted, will see you earning better rewards than the Walmart Credit Card.

With the Chase Freedom Unlimited card, you’ll earn an unlimited 1.5% cash back on all your purchases with no exceptions. Another great feature for new cardholders: the 0% introductory APR period for purchases and balance transfers last for 15 months. No “deferred interest” scams here.

Like the Walmart Credit Card, the Chase Freedom Unlimited carries no annual fee. The one downside relative to the Walmart card: You need at least good credit to qualify for the Freedom Unlimited.

Walmart Credit Card VS Secured Credit Cards

A secured credit card can be an attractive option for people with poor or bad credit. Due to the fact that these cards require a secured deposit that you then draw from to make purchases, some of these cards don’t even check your credit score during the application process.

As these cards tend to report to the major credit bureaus, they can be invaluable in boosting your credit score provided you make your payments on time. Consider a secured credit card instead of the Walmart Credit Card if your poor credit score is making life difficult for you. Of course, the downside is that you’ll need at least a few hundred dollars for the security deposit.

Check out this article about secured credit cards to learn more. Though the article is aimed at business owners, many of the featured cards can be obtained by anybody, not just business owners.

Final Verdict

The Walmart Credit Card can be useful for people with so-so credit who do a disproportionate amount of their spending at Walmart stores, especially those who prefer to shop online at Walmart.com (the 3% cash back rate only applies to online purchases). However, the average person struggling with credit issues would be better served by getting a card that can be used anywhere and which offers rewards on a wider variety of spending.

You won’t have to worry about deferred interest “special financing” offers with most of these cards either.

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