Are you the type of shopper who buys the majority of your day-to-day goods from one of the major U.S. retailers?
If so, you need to look into how much cash back you’re getting for your purchases. You could be missing out!
Walmart recently joined retailers like Amazon and Target in offering a no-annual-fee credit card that offers up to 5% cash back on purchases within its ecosystem.
That type of credit card rewards returns without an annual fee attached is music to the ears of money expert Clark Howard.
“It’s part of what’s happening with the behemoth retailers,” Clark says. “They all want you in their own orbit, so they give you an additional incentive to stay in their orbit with a 5% discount.”
While speaking about the new Walmart OnePay CashRewards Card during a recent episode of The Clark Howard Podcast, Clark said that signing up for a credit card with such substantial rewards with your primary retailer of choice is a “no brainer.”
This is provided that you’re already committed to one of them, of course.
To gain the full value of these cash back rewards, you do need to immerse yourself in the ecosystem. For example, Amazon customers need to be Prime members and Walmart customers need to be Walmart+ members to maximize the potential rewards.
And the cards are strictly for gaining maximum cash back while you’re buying your groceries, household goods, clothing, etc. from your favorite retailer. After that, we recommend that you use a 2% cash back card for everyday purchases.
Clarks describes these as “linear cards” that should play a narrow role in your wallet.
“Where do you use an Amazon credit card? ONLY at Amazon,” Clark said. “Where do you use a Target Circle Card? ONLY at Target. And where do you use the new Walmart OnePay Cash Rewards Card? ONLY at Walmart. In each case, getting your 5% additional discount.”
Clark says he prefers Walmart+ to Amazon Prime or Target Circle, so he has plans to add this card to his wallet in the near future.
Which card is the best fit for your shopping habits? Here’s a quick look at all three.
| Retailer | Credit Card | Credit Card Annual Fee | Associated Rewards Program | Rewards Program Fee | Credit Card Rewards |
|---|---|---|---|---|---|
| Amazon | Prime Visa | None | Amazon Prime | $14.99 per month or $139 per year. | Prime members earn unlimited 5% back at Amazon.com, Amazon Fresh, Whole Foods Market and on Chase Travel purchases with an eligible Prime membership |
| Walmart | OnePay Cash Rewards Card | None | Walmart+ | $12.95 per month or $98 per year | Walmart+ members earn unlimited 5% cash back on all Walmart purchases (in-store and online). Non-members earn 3% cash back on all Walmart purchases (in-store and online). |
| Target | Target Circle™ Card | None | Target Circle 360 | $10.99 per month or $99 per year | Earn 5% back at Target and on Target.com. Get 50% off a Target Circle 360 annual subscription. |
This Is NOT an Endorsement of All Store Credit Cards
Clark has a long history of warning against the dangers of “store credit cards” or “store charge cards” that offer benefits solely within a particular store.
And his advice remains the same on those: Stay away!
Generally speaking, that type of card has terrible credit terms, high APRs, and is usable only within the confines of that particular store. The downside simply outweighs the upside for most of them.
The credit cards from Walmart (Synchrony) and Amazon (Chase) are known as co-branded credit cards.
These are backed by major credit card issuers and carry a Visa or Mastercard logo. This means that you’ll be able to use them for purchases outside of those store ecosystems and will be subjected to similar terms as one of their other card offerings.
This type of card is more closely aligned with a co-branded hotel or airline card in terms of the way it enhances spending with a particular brand without prohibitive policies for being used elsewhere.
Do you have one or more of these cards? Are you enjoying your 5% cash back? We’d love to hear from you in the Clark.com community.
