Credit Card News

Capital One, Walmart to Cancel Co-Branded Credit Card Program

by Kyle BurbankMay 28, 2024

After a five-year partnership, Capital One and Walmart are breaking up.

About the development:

Late last week, Capital One and Walmart announced plans to end their agreement regarding Walmart consumer credit cards. However, a shutdown date for the program has not been revealed, with details expected “in the coming months.” In the meantime, cardholders will still be able to use their card, earn rewards, and redeem rewards.

When the program does wind down, Capital One will retain ownership and services of the accounts. This means that cardholders will likely be transitioned to a different Capital One product.

With the Capital One Walmart Rewards Mastercard, customers could earn 5% back on Walmart.com purchases and 2% back in-store at Walmart. Plus, the card earned 2% back at restaurants, 2% back on travel purchases, and 1% back on all other purchases. The card also had a unique welcome bonus where customers could earn 5% back on all Walmart purchases made using the card via Walmart Pay during their first 12 months.

Notably, in addition to the Mastercard version of the card, those who were unable to be approved might qualify for the store version simply called the Walmart Rewards Card. While this option still earned 5% back on Walmart.com purchases and 2% back on in-store Walmart purchases, the other rewards categories were dropped.

Despite the announcement, as of this writing, the cards are still listed on Captial One’s site and the application link is still active.

The backstory:

In 2019, Capital One signed an agreement to issue Walmart’s co-branded rewards credit cards — taking the program over from Synchrony, which had worked with the retail giant for nearly two decades. However, in April of last year, Walmart sued Capital One in a bid to terminate the agreement early, alleging that Capital One failed to provide adequate customer services. For example, the company cites issues, such as not sending out replacement cards promptly as well as experiencing delays in posting some transactions and payments to cardholder accounts.

However, at the time the suit was filed, a spokesperson for Capital One said, “These immaterial servicing issues were cured by Capital One pursuant to the terms of the agreement, without harm to customers, the program, or Walmart,” and said the suit itself was, “an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago, or end the deal early.”

My thoughts:

When the Walmart v. Capital One suit was filed, there were reports that the retailer had discussed bringing their FinTech app ONE into the credit-issuing process. Now that the deal with Capital One is ending, it seems almost certain that ONE will be a part of a rewards credit card program. Already, the app’s debit card product has gained perks related to the retailer, including allowing customers with eligible direct deposit to earn 3% back on Walmart purchases (up to $50 per year) and even introduced ONE Pay — which essentially allows customers to use Walmart Pay via the ONE app.

I do think it’s interesting that Capital One is retaining the cardholders post-breakup — especially if Walmart thought they were bad partners. As for what product the bank might move cardholders to, the Capital One SavorOne seems like a possibility. Then again, they might also build a bespoke purpose-built product, a la what Barclays did when it discontinued some co-branded cards.

In any case, I’m very interested to hear more about what happened between the pair and how things will eventually shake out.

Author

Kyle Burbank

Head Writer ~ Fioney

Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

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