Capital One and Walmart to launch upgraded Walmart Rewards card

Capital One and Walmart have announced a new partnership – and with it a brand-new rewards card program. On Sept. 24, 2019, Walmart will unveil two new credit card products.

In addition to a private label card, Capital One will offer a co-branded Walmart card loaded with perks for frequent Walmart shoppers. The Capital One® Walmart Rewards® Mastercard® offers a competitive rewards rate coupled with some of the most flexible redemption options on a retail credit card.

“Walmart’s mission has always been to help customers save money so that they can live better, and our new credit card program – which both helps customers earn more when paying for things in and outside of Walmart and offers many other incredible benefits – is squarely aligned with that mission,” said Daniel Eckert, senior vice president, Walmart services and digital acceleration in a press release.

Here’s a quick look at the upcoming card offers, at a glance:

Capital One Walmart Rewards Mastercard

The co-branded Capital One and Walmart rewards card will offer unique perks for a retail card, all for no annual fee. Other highlights include the following:

• 5 percent cash back on Walmart.com purchases, including grocery pickup and delivery orders
• 5 percent cash back on in-store Walmart purchases when you pay using the Walmart Pay digital wallet, for the first 12 months of card ownership
• 2 percent cash back on in-store Walmart purchases after the introductory period
• 2 percent cash back on restaurant and travel purchases
• 1 percent cash back on other purchases
• No annual fee or foreign transaction fee
• Streamlined application process, including the option to apply via text message
• Instant card issuance to your Walmart Pay digital wallet upon approval
• No minimum reward redemption threshold and no expiration
• All Capital One security tools, including fraud alerts and the ability to freeze your account

As cardholders rack up rewards on their Capital One Walmart Rewards card, they can redeem at any time for a wide variety of options – including travel purchases, gift cards, online purchases on Walmart.com, statement credits and more.

This card will also come with more benefits than the average retail card, including protections like car rental insurance, extended warranty and baggage delay insurance. Plus, cardholders can enroll in a free ShopRunner membership.

Walmart Rewards Card

Designed to be used exclusively on Walmart purchases, the private labeled Walmart Rewards Card will come with a similar earning rate to the Capital One alternative.

• 5 percent cash back on Walmart.com purchases, including in-app purchases
• 5 percent cash back on in-store Walmart purchases when you pay using the Walmart Pay digital wallet, for the first 12 months of card ownership
• 2 percent cash back on in-store Walmart purchases after the introductory period
• 2 percent cash back on purchases at Walmart fuel stations

Unfortunately, neither of the new Walmart cards will come with a cash introductory bonus.

A new competitor among retail cards?

With a new bonus category for restaurant and travel purchases combined with flexible redemption options, the Capital One Walmart Rewards Mastercard is becoming a more competitive product in the retail card space. Soon, cardholders will be able to earn rewards on a wider variety of purchases and redeem them much more strategically.

But the upgraded rewards rate might not be enough to catch up to other cards.

According to Ted Rossman, industry analyst at CreditCards.com, “Walmart’s limited-time 5 percent in-store rewards lag the Target REDcard’s indefinite 5 percent cash back payout in stores and online. Walmart is also in hot competition with Amazon, which has the Prime Rewards Visa Signature card that gives 5 percent back at Amazon.com and Whole Foods, plus 2 percent cash back at restaurants, gas stations and drugstores. If you’re only going to get one of these three cards, Walmart is probably the weakest of the three.”

See related: Which is the best card to use on Amazon.com purchases?

“The Capital One Walmart Rewards Mastercard only wins in my opinion if you buy a lot from Walmart (especially online) and you have a low credit score that precludes you from getting other cards,” says Rossman.

In short, cardholders will need to spend a significant amount on Walmart purchases to make the new card worth it. While the 2 percent cash back on travel and restaurant purchases can boost the card’s rewards rate, the true earning potential comes from the 5 percent rate on online Walmart purchases.

If you are a fan of Walmart’s grocery services, however, you can get great value out of the card. The 5 percent cash back category on Walmart.com purchases includes grocery pickup or delivery orders – allowing cardholders to rack up top-notch rewards on their grocery spending. Since this is often a category where cardholders spend a significant amount, it means you can earn plenty of rewards.

See related: Poll: Cardholders say they earn most of their rewards from groceries

Should you sign up for the Capital One Walmart Rewards Mastercard?

That depends on your spending habits. The new Capital One Walmart card has certainly stepped up its game in terms of rewards earning, redemption and other card benefits, but it might not be enough to compete with retail cards from other giants like Target and Amazon.

For the Walmart enthusiast, though, the card does offer some potential value – and you can redeem the rewards you earn for all kinds of purchases.