Category: Benefits

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The Best Walmart Credit Card

As the world’s largest retailer, you might visit Walmart for your everyday shopping and groceries. If that’s the case, each shopping trip can be even more rewarding with the best Walmart credit card. Whether you shop online or in-person, find out which credit card is the best for you.

When you shop at Walmart, be sure your credit card or rewards debit card always earns at least 1% (1 point) per dollar spent. All the cards on this list earn at least 1% on each Walmart purchase, and you can qualify for at least one of these cards when your credit score is higher than 550.

Walmart Credit Card vs Walmart Mastercard

Let’s start with Walmart’s own two credit cards.

Walmart offers two co-branded consumer credit cards through Synchrony Bank:

  • Walmart Credit Card
  • Walmart Mastercard

You can apply for either card online or at any Walmart store.  Both cards have the same 3-2-1 purchase rewards program, but the Walmart Credit Credit only works at Walmart stores; it’s a store charge card.

Best Walmart credit card

Between these two cards, Walletpath recommends the Walmart Mastercard because it is a full-fledged credit card that is accepted by any merchant in the world that accepts Mastercard. However, you generally need a credit score of 660 or higher to be approved. If your score is between 550 or the mid-600s, you may have to apply for the Walmart Credit Card instead.

Neither card charges an annual fee. Both cards will improve your credit score with on-time payments.

Earn Up to 3% on All Walmart Purchases

No matter which co-brand Walmart credit card you go with, you will enjoy the 3-2-1 rewards program that is rewarded with a cash statement credit:

  • 3% back on all Walmart.com purchases (includes Walmart Pickup and Site-to-Store)
  • 2% back on Murphy USA & Walmart gas purchases
  • 1% back for in-store Walmart purchases and anywhere else

Remember, only the Walmart Mastercard can be used for non-Walmart purchases.

The Walmart credit cards earn the highest rewards for online purchases. This higher reward rate is most likely Walmart’s way of taking the online retail fight to Amazon. Since Walmart now lets you buy your groceries and non-groceries online, you can get 3% back by shopping ahead of time and then driving to Walmart to pick it up.

Citi Double Cash

If you want a flat rate cash rewards card that earns 2% on every single purchase, regardless of where you shop, the Citi Double Cash is one of the best. The reason why is because most cash back credit cards only earn 1% or 1.5%; you get an extra 1% on every dollar by paying your bill on-time.

Citi Double Cash

If you shop online at Walmart.com, the co-brand Walmart credit cards will still earn an extra 1%. Otherwise, the Double Cash pays the same on Walmart gas purchases and an extra 1% on in-store purchases.

When you primarily shop in-store, the Double Cash is a better option if you qualify. Online forums indicate you typically need “excellent” credit of 700 or above to qualify for the Citi Double Cash. You can usually qualify for the Walmart Mastercard with “good” credit (660 or above) and the Walmart Credit Card (Walmart purchases only) is issued to applicants with a credit score of 550 or higher.

Chase Freedom

If you want a card with more flexibility but can still earn bonus points at Walmart, take a look at the Chase Freedom.

The Freedom is a cash back rewards card that earns 1% on all purchases but has a 5% rotating bonus category. In 2017, consumers earned 5% on the first $1,500 spent at Walmart in the 4th quarter.

Chase Freedom

The 2018 Chase Freedom bonus categories make it even better to earn bonus rewards at Walmart. In the first quarter 2018, you can get 5% cash back when you pay with a digital wallet (i.e. Chase Pay, Apple Pay, Samsung Pay).

If Chase offers 5% back at Walmart to close 2018, that’s two-quarters of 5% cash back at Walmart! No other credit card can make the same claim.

Two Reasons to Consider the Chase Freedom

There are two reasons the Chase Freedom can be the best Walmart credit card for you.

Firstly, you can redeem your rewards points for statement credits (like the Walmart co-brand credit cards) or you can also redeem them for gift cards or even award travel. As a part of the Chase Trifecta, it’s even possible to transfer your points directly to your favorite airline or hotel if you prefer travel rewards to cash back.

Secondly, the Chase Freedom earns bonus rewards points on non-Walmart purchases too. If you primarily shop in-person at Walmart, you will only earn 1% with Walmart’s own credit cards–the same reward rate as the Freedom in non-bonus months.

You have nothing to lose by using a flexible rewards card to keep all your points in one place. Not only will you earn potentially more rewards, they will also be more useful and practical.

Discover It Secured Credit Card

If you have poor credit (550 or higher), you have two good credit card options to earn at least 1% back at Walmart. When the Walmart Credit Card isn’t flexible enough, you need to take a look at the Discover It Secured Card.

This is one of the few secured credit cards that doesn’t charge an annual fee and also earns purchase rewards. You will earn:

  • 2% on restaurants and gas stations (first $1,000 in combined spending every quarter)
  • 1% for all remaining purchases

You sacrifice 3% cash back on all Walmart.com purchases, but you get a credit card that earns at least 1% anywhere you use it. Since you probably shop at more places than Walmart, this can be a better option.

Another reason to consider the Discover It Secured Card is that Discover will match your purchase rewards dollar-for-dollar at the end of the first year as a sign-up bonus. If you earn $100 in rewards, Discover will give you an additional $100 for free!

What is the Best Walmart Credit Card For You?

So you can easily choose the best card for you, let’s do a quick review of why you might like or dislike each of the recommendations.

  • Walmart Mastercard: Earn 3% on Walmart.com purchases, accepted anywhere, only need good credit
  • Citi Double Cash: Earn 2% on all Walmart and non-Walmart purchases, need excellent credit
  • Chase Freedom: Earn up to 5% at Walmart, rewards points can be redeemed for cash, gift cards, and travel
  • Walmart Credit Card: Only works at Walmart, good option if you have poor credit (550+)
  • Discover It Secured: Get up to 2% back on all purchases while you build credit

If you primarily shop online at Walmart, their own co-brand cards will give you the most cash back on a consistent basis. A flexible rewards card is better if you don’t want a monthly statement credit or want to earn bonus points for non-Walmart purchases too.

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How Do Online Banks Work?

Advances in the realm of technology have not only been beneficial to consumers looking for the best shopping deal or individuals hoping to connect with friends and family – old-school financial products and services have come into their own with the help of technology. Individuals have the ability to find a loan, a credit card, and even a new bank on the World Wide Web, making managing personal finances a breeze.

But some are skeptical of the emergence of so-called online banks, with confusion surrounding how they work in comparison to traditional financial institutions. Here we’ll break down the ins and outs of online banks, how to find one, and special considerations for use.

What is an “online” bank?

Throwing the descriptor “online” in front of anything makes it seem appealing to some and scam-like to others. Fortunately, banks that bear the online name mostly fall into the first category. Some confusion lies in where money is held and how it is distributed, but online banks are virtually no different than your local bank branch. There is one clear difference though: an online bank is simply a financial institution that is housed on the Internet, as opposed to having a brick and mortar branch location.

What can an online bank offer?

The majority of credible online banks offer the same menu of financial products and services as financial institutions with physical locations. They offer savings and checking accounts, money market deposit accounts, certificates of deposit, and both traditional and ROTH individual retirement accounts (IRAs). Online banks may also offer access to credit cards, personal loans, and mortgages, depending on their breadth within the market.

Just like with traditional banks, online providers offer debit cards and checks for corresponding accounts, so access to your money is no different. In most cases, banks housed online have intuitive desktop and mobile applications where customers are able to make transactions, open new accounts, and transfer money to other financial institutions as they see fit.

The benefits of banking online

The disruption of financial technology has proved beneficial to banking customers in the perks afforded by online institutions. Online banks offer a level of convenience not easily matched by conventional financial institutions because of how accessible they are. Because there is no physical branch location to visit to complete common transactions, online banks have no choice but to deliver top of the line access over the Internet.

Lower interest rates

In addition to ease of access, online banks have one clear advantage over traditional banks and credit unions. Without actual locations that customers can walk into, online banks have far less overhead in terms of rent and property expenses. The lack of financial burden allows online banks to offer benefits to customers by way of higher interest rates on deposit accounts. In some instances, online banks that offer lending products may pass the overhead savings down to customers through lower rates on personal loans as well.

For example, the Federal Deposit Insurance Corporation reported the average interest rate for savings accounts within the United States at a dismal 0.06%, as of April 2016. That equates to an annual interest accumulation of $6 on a $10,000 deposit. Not all that exciting, to say the least. In comparison, the average interest rate for online banks is 1.00%, which equates to an annual accrual of $100 simple interest for the same $10,000 deposit. That $94-dollar difference is enough for some banking customers to make the leap to online banking.

Lower deposit rates

But the benefits don’t stop at convenience or interest rates. The top online banks generally have no or relatively low minimum deposit amounts, specifically for checking and savings accounts. It is also hard to find an online bank that charges fees for transactions like direct deposit, internal or external transfers, or withdrawals. Unlike some brick and mortar financial institutions, online banks are free of the allusive maintenance fee as well. All of these benefits offered by online banks create a way to make your money work harder for you, without costing a pretty penny.

Special considerations with online banks

On the almighty Internet, bad apples lie around every corner. It can be a challenge to determine with full faith which companies found online are legitimate and which are at best, questionable. The threat of finding a bad apple in the online banking world is less concerning given financial regulations in place from government and private authorities, but it is necessary to do a bit of research prior to making the move to an Internet-based financial institution.

Check their website

To ensure you’re getting the most of your banking experience with an institution that is on the up and up, do some snooping on the provider’s website to start. Most legitimate online banks will have a professional “About Us” page, and the details listed in this section should provide the information you need to either move forward to continue your search. For instance, online banks that truly provide the same services as a traditional financial institution will be FDIC insured, and that information should be clearly listed on their site with the terms “Member FDIC” or “FDIC Insured”. Just like well-known banks, deposits held with an online bank have insurance coverage provided by the FDIC in the event the bank becomes insolvent. Your deposits are protected up to certain limits, depending on the type of account held and the number of account owners.

Look for a physical address

In addition to checking for FDIC insurance coverage, your research should quickly lead you to an actual address for the online bank’s headquarters or national offices. Although online banks do not have branch locations, they must still have a physical address from which they do business. If you can’t seem to find that information for a bank you are researching, it may be necessary to find an alternative.

Finally, take care to protect the personal information you share online. The Internet is mostly a safe place to conduct business, but if something feels off – a less than professional web presence, bogus contact information for the bank, or requirements for upfront payments or other bank account information – move on to another choice. Online banking can be a smart move toward managing your personal finances in an efficient way, but it is up to you to ensure you are banking with a real, secure institution online.

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Is it Expensive to Refinance My Home?

Home ownership is one of the goals most individuals, both young and old, strive to achieve. In healthy market environments, real estate appreciates in value creating a long-term asset that generates the potential for a substantial return over time. Fortunately, becoming a home owner does not have to be a difficult task in terms of financial ability, as a full cash payment is not a necessity thanks to financing through a mortgage. But when a mortgage is taken out on a home during a high interest rate market, or when credit is in less than ideal shape, the total cost of financing can be high.

To remedy an expensive mortgage due to a higher interest rate, home owners have the ability to refinance through a mortgage lender, bank or credit union. Refinancing allows the borrower to essentially create a new loan – preferably with better repayment terms and a lower applied interest rate – and pay off the initial mortgage. Refinancing can extend repayment for up to an additional 30 years, creating a less burdensome monthly payment. In some cases, a shorter repayment period can be elected (such as 15 years), to expedite full repayment of the loan on the home. In the best scenarios, a combination of a lower interest rate and a suitable repayment term helps home owners benefit in the long run from their residential property.

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While refinancing a mortgage is appealing, especially while interest rates remain at historically low levels, the process is not free. Let’s examine what goes into the cost of refinancing a home before discussing if it is a viable solution.

Breaking Down Mortgage Refinancing Costs

The general school of thought that guides mortgage refinancing decisions is this: if you are able to reduce your interest rate by at least 1%, the refinance probably makes sound financial sense. However, there are a number of ancillary factors that have an impact on the overall refinance transaction. The following are costs commonly associated with refinancing a mortgage.

Mortgage application fee: most lenders assess a mortgage application fee for all refinance applications. This fee includes the cost for pulling a borrower’s credit report and other administrative expenses the lender passes down to the individual(s) applying for a new mortgage. On average, the mortgage application fee falls between $200 and $500.

Origination fee: assessed as a percentage of the total new mortgage amount, an origination fee is often one of the highest fees associated with any refinance transaction. Origination fees are typically 1%, and go toward paying the chosen lender directly.

Appraisal fee: All lenders requires homeowners to have an appraisal completed when a refinance application is submitted. An appraisal allows the lender to determine the market value of the home, and if the borrower has accumulated enough equity to justify the refinance or secure a lower interest rate. Appraisal fees range from $200 to $500 for most refinance applications.

Title fees: another factor in the cost of refinancing are title fees associated with generating a new mortgage. Lenders often require a title search to ensure there are no glaring issues with ownership or liens. Title insurance provides protection to both the homeowner and the lender in the case issues arise in the process. Title fees may also include miscellaneous charges, such as courier costs, express mail costs, and recording costs with the county. On average, title fees range from $400 up to $800 for most refinance transactions.

Insurance fees: all lenders require a homeowner to have an insurance policy in place at the time of the loan closing to protect the replacement cost should something happen to the home itself. In addition to typical homeowner’s insurance, lenders may require flood certification or special hazard insurance should the property be located in certain areas of the country. Insurance fees range depending on the property location.

Points: mortgage points fall into two categories – origination fees and discount fees. Lenders offer points to borrowers as a way to buy down the mortgage interest rate offered. Discount fees are prepaid interest that homeowners pay up front, while origination fees simply equate to compensation direct to the lender offering the loan. Regardless of type, one mortgage point is equal to 1% of the total loan amount.

The combination of these various fees add up quickly for homeowners looking to refinance their residential property. All in, refinancing fees total an average of 1.5% of the total amount of the loan, and are due at the time the loan is fully processed. In some instances, lenders allow the homeowner to roll closing costs associated with a refinance in to the new mortgage loan, saving them the out of pocket expense. However, adding a few thousand dollars to the total mortgage balance affects the monthly payment, and ultimately, the total cost paid for the mortgage over time.

Should I Refinance?

Although the rule of thumb relating to interest rate reduction is a great place to start the refinance discussion, the addition of closing costs inherent to the transaction should cause you to pause before pulling the trigger. Every homeowner has a different situation in terms of equity accumulated in the home, time to repay, and total cost of their current mortgage, making the decision to refinance unique to each individual. However, being aware of the out of pocket costs necessary to close on a new mortgage through the process of refinancing should paint a clear picture as to if the transaction is worth it, or not.

To safeguard yourself from making a poor financial decision when it comes to refinancing your home, start with a lender you trust. If you can’t seem to get a clear answer as to what the refinance will ultimately cost, or you have a strong gut feeling that you are paying too much, ask! Lenders are required to provide full disclosure of all fees associated with a refinance transaction, just as they are with a new mortgage. It is also in your best interest to shop around for various lenders when starting down the road toward refinancing. You may be surprised the difference in costs associated with closing on the new loan, as well as the interest rate and repayment terms available. Above all else, plan to crunch the numbers prior to charging ahead with a refinance to ensure it is the best financial decision for your circumstances.

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Are Credit Card Sign Up Bonuses a Scam?

Are Credit Card Sign Up Bonuses a Scam?

Credit card sign up bonuses may sound like a scam sometimes, but they aren’t if you’re smart about managing your credit card spending and bill payment.

Sign up and get $350 cash back! Sign up and get 5000 points! Sign up and pay 0% interest! You’ve seen these claims on everything from the billboard to your junk mail. Every credit card advertisement seems to be selling a card and a deal that’s too good to be true. How can they give away points and money just for registering for the card? Everyone knows that first lesson in economics: there’s no such thing as a free lunch. So, with credit card sign up bonuses, who’s paying?

 

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It’s a Contract: Follow it and You’ll be Fine

Each of the sign up bonuses comes along with a contract between you and the credit card company. The sign up bonus is an offer that is available to you under specific conditions. The condition may be that you are required to put a certain amount of money on the card within a certain period of time. Or, the great terms may be limited to a certain length of time. These conditions are usually clearly listed and they must be meticulously followed.

For example, the Chase Sapphire Preferred card has a sign-up bonus where you can earn 50,000 bonus points when you spend $4,000 on purchases in the first three months of opening the account. Those points are the equivalent to $625 in travel when you redeem them through Chase Ultimate Rewards. It sounds like a pretty sweet deal, and it certainly is – if you’re planning on charging $4,000 to your credit card the next three months. And, most importantly, it’s a sweet deal if you’re also able to pay off $4,000 from your card by the payment due dates.

What is a credit card?

When considering all the sign up bonuses, it’s important to remember what kind of product you’re signing up for. Credit cards allow you to borrow money from your bank to make purchases that you then pay back later. It’s a convenient tool for purchasing anything from a latte to airfare to Rio. You have a certain period of time to pay back the money, but if you don’t do so in that grace period, you’ll need to pay back the money and a percentage of interest on the amount owed. Banks don’t loan money for free and this interest is big businesses.

In the example above, the sign up bonus is provided if you spend $4,000 in three months. For some people, this amount of money is a normal amount that they charge and pay off in three months. For other people, they need to spend more to meet the $4,000 bonus sign up. If this is more than they usually put on a credit card, it’s also more than they usually pay off of a credit card. Even if they pay off part of the balance, but $1,000 is left and is charged interest. Depending on how long balance remains and therefore how much interest is charged, the interest payment can eliminate any bonus that came with the sign up points. Alternatively, they find out they can’t afford to put $4,000 on the credit card in three months. In this scenario, they avoid paying interest, but they also lose the sign up bonus.

Another potential pitfall is in the zero interest sign-up bonus. The Discover it® credit card charges 0% interest for the first 12 months. This is a sweet deal if you want to make a large purchase, like a laptop or minor home renovation supplies, and pay it off over a few months. You can borrow that money for no interest at all over that first year. However, after that first, glorious year, you will have to pay interest on any remaining balance. Carrying a balance on your card went to being worry-free to whoa-expensive. Also, once the interest kicks in, it’s as a variable annual percent rate (APR), which is connected to your credit score. You can get a great rate if you have great credit. If your credit score isn’t so hot, you could end up on the high end of the APR scale. Any balance left on in Month 13 will be costly.

Sign Up Bonuses are a Scam Only as Much as Credit Cards are a Scam

The sign up bonus is no more a scam than credit cards themselves are a scam. Credit cards are an extremely expensive way to borrow money. They are very useful when used wisely and with prudence. However, as soon as a credit card has a late payment or a balance that collects interest, they are a big money maker for the banks. There is nothing unclear or evil with a credit card or a sign up bonus. They are simply financial agreements between you and the company. So long as the contract is followed, there is no issue. However, the sign up bonuses can require balances that some consumers cannot pay off, and so will accrue interest. However, it’s the responsibility of each consumer to decide if they can meet with conditions to receive the perks without any downside. The contract is clear, but it’s up to you the consumer to keep up their end. The credit card company stands to make a lot of money if you don’t.

Conclusion

Credit card sign up bonuses are not a scam. They are a marketing tool with clear terms and conditions. Some may be built on setting people up to hold a balance on their card, but the decision to sign up and accept the financial conditions is up to the consumer. Companies provide clear statements about the bonus conditions and timelines. If you can use a credit card with clever caution, you can save money and even make money with these bonuses. However, you have to remember that there’s no such thing as free lunch. If you’re not careful about paying off your credit card and remembering the changes in your card conditions, you will pay for your free lunch with your card balance interest.