Wal-Mart store card switch gives consumers reason to compare
If you're a Wal-Mart
or Sam's Club co-branded credit card
holder, you're about to get something
other than a discount from the store: You're getting a new credit card -- and
with it comes a new reason to check up on the benefits of holding a co-branded
Sam's Club, like many other retailers, offer two types of credit cards:
store-only credit cards and co-branded credit cards. Co-branded credit cards are
the result of partnerships between retailers and banks or credit card payment
networks such as Visa, Discover, American Express and MasterCard, identified by
the network logo in the corner of the plastic card.
Stores Inc. is making a co-branding partnership change later this year,
switching from the Discover Financial Services payment network to MasterCard,
according to an April 7 announcement made by the card program's financing
bank, GE Capital.
As a result more
than 4 million cardholders will have access to a broader acceptance network and
a different package of rewards and benefits. The changeover starts in late June
for Sam's Club cardholders and late August for Wal-Mart cardholders.
are a Wal-Mart Stores Inc. cardholder or not, understanding the benefits of a
co-branded credit card program can help up get most out of your card's program
and open your eyes to new credit options.
Unlike single-store credit card holders,
co-branded credit card holders don't have to spend their credit all in one
While store credit cards can be used only
at the sponsoring merchant or merchant group, co-branded retail credit cards
are accepted wherever the credit card payment network is accepted.
Inc. cardholders have had this kind of spending flexibility through the
Discover co-branded credit card but the new agreement with MasterCard will give
Wal-Mart and Sam's Club card holder's access to MasterCard's larger global network
of 30 million merchants.
credit card holders have access to merchant-specific perks such as sales, items
or even prices that noncardholders don't. However, those who hold a co-branded
store card have access to those benefits and more.
right now co-branded Wal-Mart credit card holders receive Wal-Mart benefits and
also those available to all Discover cardholders. Once the partnership changes, cardholders
lose the perks specific to Discover, but gain the ones that come with
MasterCard both offer cardholders some type of emergency roadside assistance,
extended product warranties and fraud protection, but those benefits details
vary between networks. For example, Discover offers customers who've had their
checked baggage delayed three hours or more up to $500 of Baggage Delay
Insurance to replace their travel essentials. MasterCard does not offer
anything to customers experiencing a baggage delay, but will help those who
have their luggage stolen or lost. Discover credit card holders also have
access to 24/7 travel assistance for sticky situations emergency medical care
or sudden travel changes but MasterCard cardholders may get more travel
discounts and opportunities overall through a specific travel benefit program.
a MasterCard holder you also have access to programs like Priceless Cities,
which provide exclusive access and experiences to the most traveled-to cities
around the world," MasterCard's Vice
President of U.S. Markets Communications Sarah Ely
Beginning June 23, Sam's Club co-branded MasterCard holders also have access to a new cash back program that could earn them as much as $5,000 cash back annually. The program, Sam's Club 5-3-1, allows qualifying Sam's Savings, Sam's Business and Sam's Plus members to earn 5 percent cash back on fuel, 3 percent cash back on dining and travel and 1 percent cash back on all other purchases.
Sam's Plus cardholders will also be automatically enrolled on June 12 to receive $10 cash rewards for every $500 spent on qualifying pre-tax Sam's Club purchases.
well-established major credit card payment networks also have well-established consumer protection measures in place, such as extended warranties and limits on fraud
how network rewards programs apply to co-branded store cards, those network's
terms and conditions do as well. For example, once Wal-Mart Stores Inc. makes
the switch to the MasterCard network cardholders will have access to MasterCard's
extended product warranty coverage, price protection claims, and identity theft
resolution services if they become victims of fraud, according to Ely.
who want to compare the benefits need to look to their "terms and
conditions" document, which are typically mailed with the card, but also
may be available online.
set of these major payment network benefits to the terms and conditions of
Wal-Mart's store-only credit card, which come solely from the issuing
bank, the information from the big payment networks are much more detailed. This is not to say that consumers who hold
store-only credit cards are unprotected, they would just likely have more
options as a co-branded cardholder, such as chip-enabled security.
Sam's Club says it is the first mass retailer to actively implement embedded chip technology in their new cards giving co-branded cardholders even more protection against fraud.
So, if certain
card benefits are more important to you than others, examine the differences see
if the card is still right for you.
See related: Rewards programs move toward flexible, immediate spending
, Travel rewards vs. cash back: Do you really want to be practical?
, Should I ditch my checking account to earn credit card rewards?
Published: April 17, 2014