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Walmart Discover Credit Card: Will You Shop till you Drop?

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Today, I’m taking a look at the Walmart Discover credit card. Wal-Mart is one of the most recognised names in retail and they spearhead many campaigns that benefit customers state-wide. They were one of the first major American companies to accept the “chip and pin” credit card machines that we’ve all become accustomed to and in a bid to keep up to date with the times, Walmart offer two credit cards to their consumers which aim to offer bonuses, cash rebates and a smarter way to shop for all. The Walmart Discover credit card seems to be the less rewarding of the two cards offered by the corporate geniuses, so it’ll be interesting to see how this card fares against its competitors. Please be aware that this card is not issued by Discover Financial Services themselves, it is actually issued by GE Capital Retail Bank, who are licensed to trade using the Discover name.

Walmart Discover credit card offers:

The Walmart Discover credit card is a rebate based credit rewards card, which means that cardholders can enjoy monetary returns on their spends. The card kicks off this rebate rewards run by offering new customers a rebate of $25 if you open your account and then spend a minimum of $75 on it on a single transaction, the very same day (up until January 31st). It doesn’t matter whether the purchase is made either in-store or online and will show up on your first bill as statement credit.

The Walmart Discover credit card initially gives cardholders relatively small cash rebates that get larger as spending builds. It offers 0.25% on yearly purchases of up to $1,500, 0.50% on yearly purchases from $1,501 to $3,000 and 1.0% on yearly purchases of over $3,000.

Cash rebates are easier to earn with the Walmart Discover credit card than with a regular Discover card, because as soon as you earn $10 in rebates, you will be sent a check for that amount. The regular Discover card requires you to earn $20 before you can redeem rebates, and you have to redeem the rewards yourself.

Walmart Discover credit card standard features:

As we all know, all credit cards have a range of standard features that can wrangle in the potential cardholder, so let’s take a look at what the Walmart Discover credit card has to offer:

  • Cardholders can use the Walmart Discover credit card anywhere that the trademark of Discover is accepted
  • No annual fee
  • You get a three-cent-per-gallon discount when you buy gas at Walmart gas stations and pay for it with your Walmart Discover card
  • Initial credit limits start as low as $150 to make it more accessible to those with low to average credit scores, or for first time credit applicants
  • Receive a free monthly FICO® Score when you sign-up to receive online bank statement
  • $0 fraud liability

 

Should I commit to the Walmart Discover credit card?

That, as always, depends on what you want from your credit card.

To begin with, there are no point rewards on Walmart purchases, what other reason is there not to commit to this card? If you have low or bad credit, you might want to sign up to build your credit score and that is perfectly feasible, BUT (and that’s a very big but) this card has a few huge stings in its tail that you might not be aware of.

Interest rates are really high. The APR currently stands at 22.9% and the APR rate for cash advances is a massive 25.9%. What you didn’t know is that Wal-Mart pushes the cash advances on this card as a feature and is therefore basically setting you up for a costly fall.

The Walmart Discover credit card rebates are tiered, but the higher rate will never apply to the lower tiers. So, again Walmart (and let’s not forget GE Capital Retail Bank) are setting you up to earn less. For example, if you spend $5,000 in one year, you’ll get a $3.75 rebate for the first $1,500 you spend, a $7.50 rebate for the next $1,500 you spend and a $20 rebate for the last $2000 you spend, which gives you a grand total of a $31.25 cash rebate on that $5,000 spend. So many other credit cards can offer you so much more, and they don’t even have to be competitors.

And then there’s the biggest catch of all…

There is currently a 0% percent interest coupon (available until March 7 2014) that must be scanned at the till at the time of purchase. It can’t be redeemed online, but you can print the coupon from directly from the Walmart website. The coupon will award you 0% interest based upon a valid, single-receipt purchase of:

$150 – $298.99 for 6 months

$299 – $428.99 for 12 months

$429 – $598.99 for 18 months

 $599 or more for 24 months

This may sound like a nice offer, but I can assure you that it’s not a pretty feature at all. Basically, this is a regular offer to pop up with GE Capital Retail Bank’s teamed retail credit cards, and it can potentially cost you more than you bargained for. The seemingly wow 0% interest  for 24 months on a $600+ purchase is great, until you don’t make the payment on time. If you don’t pay your statement balance 24 months later (which will be unrelated to that initial spend anyway), you will then get charged the FULL interest on that particular purchase.  With a standard purchase APR of 22.90% you will be paying 22.90% of $600 a month, for 24 solid months that you should’ve been clear for. The 0% interest vanishes right before your very eyes. They hide this massively misleading offer from all their unsuspecting customers by naming it ‘Special In-Store Financing’. For that reason alone, this card gets a massive ‘DON’T SIGN UP’ from me.

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