Pairing one of the rewards credit cards from Walmart with another cash back card could be beneficial if you’re trying to earn extra cash back. Even pairing store cards – including Target REDcard – could work if you find yourself consistently shopping at the retail giants.
Dear Cashing In,
I’m a mom with three kids, and I have a Target credit card, which I love. It gives me 5 percent back at Target and free shipping. But I also do a lot of shopping at Walmart.
What’s the best rewards card for shopping there? And if I buy groceries, will it count as a supermarket or a different kind of store? – Debbie
As far as retail cards go, the Target REDcard is one of the most generous: 5 percent off all purchases – with no limit – applied right at the checkout counter. It doesn’t show up later as a rebate in your statement and you pay no annual fee. Plus, as you note, you get free shipping on online orders.
But how does it compare to the new and (seemingly) improved Walmart credit cards?
See related: New Capital One Walmart cards: Are they worth it?
How much cash back Walmart credit cards offer
Many retail credit cards, such as those from department stores, have a more complex rewards structure that might include a mix of coupons after a certain amount of purchases at the store, big discounts on the day you sign up for the card and targeted promotions. Those can make sense for regular customers of those stores.
The Capital One Walmart Rewards Mastercard offers 5 percent cash back on online purchases at Walmart.com, plus 5 percent back for in-store purchases – but just for the first 12 months when you use the card with Walmart Pay, in the case of the latter. After the first year, or if not using the digital wallet app, cardholders earn 2 percent on purchases in Walmart stores. It also gives 2 percent back on travel and restaurants and 1 percent back on everything else. The Walmart Rewards Card version of the card is similar but is accepted only at Walmart. Neither has an annual fee.
Target credit card vs. Walmart credit cards
Comparing the Target and Walmart cards, you would probably do better using the Target card at Target rather than the Walmart card at Walmart.
This is in part due to Target’s rewards program, since Target’s 5 percent back is for both online and in-store purchases in perpetuity, while Walmart’s 5 percent back is applicable to online purchases also, but to in-store purchases in only the first year of card ownership (and require you to use Walmart’s mobile wallet).
Of course, the card you choose will depend where and how you shop. If you shop a lot at both places and are poised to receive that 5 percent back, you could consider getting both.
You might also consider pairing one or both of these cards with a cash back card. If you do that, you are essentially establishing a floor on your rewards earning.
With the Target and Walmart cards, if you shop at most other stores, you receive just 1 percent back. You can improve on that with a cash back card that earns a higher rate – like the Citi® Double Cash Card, which pays a flat 2 percent back: 1 percent when you charge and an additional 1 percent when you pay off those purchases.
What purchases count as ‘groceries’?
Another question you raise is what kind of purchases count as grocery purchases.
Some cards, like the Blue Cash Preferred® Card from American Express, give extra cash back at U.S. supermarkets. However, Walmart typically isn’t eligible to give you bonus points on rewards credit cards, even if you are buying groceries there. The same goes for Target.
Rewards cards that offer grocery bonuses usually say in their offer terms that the only stores eligible for grocery bonuses are those with merchant category codes (MCCs) that show up as groceries. Big superstores usually don’t count.