Capital One Walmart Rewards Mastercard Review: 5% Back, But With Restrictions

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Today, Walmart launched their new Capital One Walmart Rewards Mastercard (credit card) and Walmart Rewards Card (store card that only works at Walmart). Here are the highlights, which unfortunately include some hoops and hurdles to jump through.

  • Intro offer: 5% back at Walmart in-store when using Walmart Pay during the first 12 months.
  • 5% back on purchases at Walmart.com and Walmart app (includes Walmart Grocery Pickup and Delivery).
  • 2% back on Walmart purchases in stores after the introductory offer.
  • 2% back on restaurants and travel.
  • 1% back on all other purchases.
  • No foreign transaction fee.
  • No annual fee.

You can redeem your rewards during online checkout at Walmart.com, for recent purchases, and statement credits. (Gift cards and travel are listed as options too, but why would you choose that over cash unless they offer some sort of bonus?)

The only long-lasting benefit is the 5% back at Walmart.com and Walmart app (includes Walmart Grocery Pickup and Delivery). If you spent $1,000 a year at Walmart.com, then that’ll get you $50 in cashback. I might spend that much at Walmart in-store over a year, but definitely not Walmart.com at this time. If they released Walmart’s in-store sales volume compared to their online sales, I think you’d see a large disparity.

I was disappointed to see that 5% back in-store only works (1) if you remember to set up and use their Walmart iOS or Andriod app and (2) it only lasts for the first 12 months. After a year, it’s back down to only 2% back on Walmart purchases which really isn’t very appealing with multiple 2% cash back on everything alternatives. Did they not realize that nobody liked their old Synchrony card because it only offered a super-sad 1% back at Walmart stores?

Why is Walmart so stingy with the cash back? Perhaps Walmart’s profit margins are too slim to match Target REDcard’s 5% cash back on both in-store and online purchases. I suppose you could see that as a good thing. But still, it gives me little reason to get this card. Costco only offers 2% back via their self-branded credit card, but at least throws in 4% back on gas and 3% back on travel and restaurants. Meanwhile, Amazon offers 5% back if you have Prime and includes Whole Foods purchases.

Bottom line. Walmart has a new co-branded credit card. The only long-lasting benefit is the 5% back at Walmart.com and Walmart app (includes Walmart Grocery Pickup and Delivery). It’s not very good any place outside of Walmart, and not even especially good at Walmart stores after the first year. If Walmart.com steps up their game to include better delivery options, perhaps it will be worth a second look.

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Comments

  1. I feel like this review is a little unfair to this card and I think it may be because Walmart has such a large physical store preference you’re down weighting the value of the card for Walmart shoppers.

    Walmart.com is very similar to Amazon in concept – a marketplace + stuff sold by the company itself. In this sense it’s basically the same as the Amazon store card except for the Whole Foods (which there are only 500 of in the US).

    Anyway, my point is that summing up the Amazon card as “can add up to serious rewards” versus the Walmart one as “the only long-lasting benefit” feels like a slightly overly negative categorization. Especially w/ the investments Walmart.com has been making to improve the experience and shipping times.

    All of that said I’m still much more of an Amazon.com shopper, but with 5,000+ Walmart physical locations (presumably one could do in-store pickup if didn’t qualify for free shipping?) I could see this being an interesting option for loyal Walmart customers. Especially for those that don’t live in Prime Now or 1-day territory and could order everything for same-day pickup at their local Walmart store but purchase via walmart.com.

    • Walmart.com is definitely getting better, but in my experience it still has a ways to go. Things are out of stock a lot of the time, especially their popular private label products. If they do have it in stock, I have to reach $35 to get free shipping. If this card for example offered free shipping with a lower minimum, that would be a good perk.

      If you really bought thousands of dollars of stuff from Walmart.com each year, then yes 5% back would be great. I believe the average Prime customer spends over $1,400 a year at Amazon. But at only 5% of total online shopping market share while Amazon has 50%, I feel like most people use Walmart.com sparingly like I do, for maybe $500 max of stuff a year. If so, that would add up to $25 in rewards a year at 5% back, and only $15 more than a 2% cash back card. Compare that to the thousands that a regular Walmart box store customer probably spends each year.

      I simply doubt this card will be as popular as the Target/Costco/Amazon cards. They need a simple hook, even 3% flat back at Walmart in-store would be a significant improvement.

      • David M Schuette says:

        True, it does have to be weighed against the fact that other cards will give you some cash back. The variance is then quite small and probably not worth it for most people.

        And the experience is worse on walmart.com vs. amazon.com as well. I still think that there might be an interesting buy online / in-store pickup aspect that is useful for people w/ lack of options nearby. Could replace some of their in-store spend (or maybe that’s too just an aspiration).

        I’m also finding that more and more it pays to shop around off of Amazon. Sometimes 3rd parties will sell on Amazon at full price but have promotions on their on domain.com website. Or that the Amazon price is simply just quite a bit higher than in-store.

        • Definitely, making every Walmart and Target a “drive-thru” store where I can order online/in-app and then drive up and have them immediately put everything in my car is the best option for them to fight against Amazon. It would save them delivery costs, which can be passed onto the consumer and thus let them possibly have lower costs than Amazon. I hope they can figure out the logistics of that.

  2. Yeah, when Target & Amazon offer 5% online/instore with no limitations, the new Walmart card doesn’t even match it past 1 year. You’d think they’d offer a continual carrot to entice more ppl to use Walmart Pay/WMT.com or even WMT Grocery, but alas they don’t.
    No real reason to apply for this.

  3. So they do not offer free shipping, like the Target Red card does?

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