It's always exciting when a big name breaks off a relationship and immediately takes up with a new love, right?
Well, there's big relationship news in the co-branded credit card world: Wal-Mart is dumping Discover for MasterCard.
But what exactly is a co-branded credit card, and why does it matter? In simple terms, a co-branded card is one in which two companies bring their brands together. So, while a plain Wal-Mart retail credit card simply has the Wal-Mart name on it, a Wal-Mart co-branded card has both the Wal-Mart name and the logo of a card payment network.
For now, that payment network is Discover. But this month, Wal-Mart Stores Inc. revealed that it will end its co-branding relationship with Discover and get together with a bigger card payment network — MasterCard. Wal-Mart stores will make the change in August, according to MasterCard spokeswoman Sarah Ely. And Sam's Club, a division of Wal-Mart Stores Inc., will do the same a little earlier, in June.
It's easy to see how MasterCard might have wooed Wal-Mart. On its page on co-branded cards, MasterCard makes sweet promises to retailers, whispering that its co-branded cards can help “attract new customers” and “strengthen the bond” with existing ones, as well as keeping the retailer “top-of-mind” for consumers.
But what's in it for you, the cardholder?
Well, first, it depends whether you have a plain retail card or a co-branded card. Wal-Mart and Sam's Club plain retail cards can only be used at their stores.
But if you have a co-branded card, you should be getting a new card with the MasterCard logo sometime this summer. In that case, here's what you can expect:
You'll be able to swipe your card in more places. You've been able to use your card at any store that accepts Discover. Now, you'll be able to pull out your co-branded card to make purchases anywhere MasterCard is accepted — which, as we all know, is just about everywhere. MasterCard has “global acceptance” at more than 30 million merchants in over 210 countries, Ely says.
Some card benefits will change. All credit cards come with perks — some more than others — and some of those are determined by the card payment network. Each card payment network offers its own set of perks to cardholders. Discover includes a year of extended warranty on products with an original warranty of 36 months or less, a 90-day return guarantee, price protection (refunding you if you find a lower price within 90 days), and purchase protection up to $500 when a recently purchased item is damaged or stolen. It has 24/7 travel assistance that includes lost luggage tracking and lost passport replacement. It also offers flight accident insurance.
MasterCard offers a range of similar benefits, but the details vary. For example, MasterCard also offers a one-year extended warranty but doesn't put a time limit on the length of the original warranty. And MasterCard also provides some benefits that Discover doesn't, such as trip cancellation insurance and hotel/motel burglary insurance, which reimburses you for items stolen from your room when you pay for your stay with your card.
The MasterCard fine print states that its benefits may vary by card and issuer, though, so it's important to read the terms and conditions, as with any card. And Ely says the nitty-gritty details about exactly what those terms and conditions will look like for the Wal-Mart and Sam's Club cards aren't yet available. So, stay tuned!