Walmart Unveils a New Rewards Card, but Consumers Should Be Wary
According to Marketwatch.com, big box retailer Walmart is offering a new branded rewards card. These types of reward cards have been popular for years, with many consumers enjoying the perks that come with being a loyal consumer. Walmart hopes to compete with Amazon, which has been offering its own branded card for some time now.
Before signing up, consumers should consider the pitfalls associated with any branded credit card. It is always important to approach credit sensibly and not accumulate more debt than you can pay.
Features of this Card
Walmart has already offered a card, so the new one (offered with Capital One) will have different features. In fact, the card is designed with online shopping in mind.
Here are some of the perks:
- 5% back on any purchase made at Walmart.com, which includes Walmart’s grocery service
- 2% back on travel and restaurants, including hotels and airline tickets
- 1% back on all other purchases
The Walmart card will also offer major rewards—at least initially—if you choose to pay using the Walmart app, Walmart Pay. For the first year, you will qualify for 5% back on purchases made in the store. After the promotional period ends, you will receive 2% back for all in-store purchases.
As you can see, purchases made on Walmart.com offer bigger rewards. If you find yourself purchasing a lot online, then this is a card to look into.
Ask Yourself if You Need the Card
Getting cash back is always nice, but it is also a convenient incentive for racking up more in debt charges than you can ever possibly pay back. According to Marketwatch, research has shown that these types of branded cards are often used by consumers with lower credit scores and lower incomes. This combination means that consumers signing up are generally at a higher risk of going into default than other people.
Unless you pay your balance each month, you will also accrue interest. Check what the interest rate is on any card offered to you. Currently, Walmart expects its interest rates to be between 17.99% and 26.99%. Compounding interest can dramatically inflate a credit card bill, sending someone into a tailspin.
You should also check whether you want a card with a different retailer. If you don’t buy much at Walmart, it doesn’t make sense to get a card there. Target, for example, offers a rewards card that offers 5% back for in-store purchases indefinitely. This might be a more sensible option for someone who doesn’t do a lot of online shopping.
Are You Struggling with Debt? Contact Nowack & Olson
As we have written about recently, credit card debt continues to pile up, though consumers have so far been able to manage the debt load. Should your circumstances change, you should meet with an attorney. Instead of shifting debt around and delaying the inevitable, it makes sense to pull off the band aid and consider bankruptcy.
The Plantation bankruptcy attorneys at Nowack & Olson have helped over 20,000 people obtain bankruptcy relief. Contact us today 888-813-4737 to schedule a free consultation.