Sam's Club Credit Card Review: Will It Benefit You or Not?

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Sam's Club Credit Card Review: Will It Benefit You or Not?

Postby CreditCardGuru » Mon Sep 14, 2015 6:03 am

exterior of Sams Club store
In 2015 should you apply for Sam's Club Discover? This review of their Discover credit card reveals what you need to know about the rewards program... you would be better off without it!

Update: Sam's Club converted its Discover cards to MasterCards on June 23, 2014. The new version of the card will include an EMV chip and a new rewards program. Read about it here.

Quick Overview: If you are a Sam's Club Advantage member, you should avoid their card because it only gives a max of 1% and it's only given on spending beyond $3,000 annually (your purchases below that earn even less than 1%). You are better off getting the Discover it card with 5% cash back. This card is accepted for payment at both Sam's Club and Walmart:

Even though America has recovered from the Great Recession, our economy is still a far cry from what it was during the "good ol' days." For this reason, being frugal and saving money is a must and shopping at Sam's warehouse club stores is a great way to do that!

But how much money will the Sam's Club Discover card actually save you? Here's what you need to know about it...

Why doesn't Sam's Club take Visa or AmEx?
Until the Discover-to-MasterCard switchover, Sam's club has a special partnership with Discover. It's very similar to the agreement Costco has with American Express.

But did you know that you can use any Discover card to pay for purchases at Sam's Club? So you can use the Discover Sam's Club card – or – you can use a different Discover credit card.

How well do you know the rewards program?
The Sam's Club Discover credit card actually has two different reward programs. The one you get depends upon the level of membership you have at Sam's Club – one program is for Advantage Members and the other is for Advantage Plus Members.
What they have in common: The rewards are given out once per year, every February. This rebate is based on total spending during the prior 12 months. Each bracket of spending is given a different percentage of cash back.

What's different about them: For higher amounts of spending, the Sam's Club Advantage Plus Members get better rewards.
The annual cash back brackets for Sam's Club Advantage Members:

  • Qualified spending up to $1,500 will earn 0.25% cash back
  • Spending between $1,500.01 and $3,000 will earn 0.50% cash back
  • Spending between $3,000.01 and $250,000 will earn 1% cash back
The annual cash back brackets for Sam's Club Advantage Plus Members:
The first two brackets are the same as above, but after that it changes...

  • Spending between $3,000.01 and $5,000 earns 1% cash back
  • Spending between $5,000.01 and $10,00 earns 1.75% cash back
  • Spending between $10,000.01 and $250,000 earns 2% cash back
As you can see above, with the Sam's Club Discover the maximum rewards Advantage Members can earn is what most people would probably consider an average rebate. On the other hand, the Advantage Plus Members will earn an above average rebate on the portion of spending the falls into the higher brackets.

Either way, you need to understand that even when the higher brackets are reached, the cash back on the prior purchases remains the same. i.e. The amount spent between $1,500.01 and $3,000 will always equal a 0.50% rebate, regardless of whether or not a higher bracket is reached after.

Fine print exclusions: When I was looking over the application I found something interesting... it appears no rewards are given when the Discover version is used at competing wholesale stores. For example, it lists over a dozen stores where no rewards are given such as BJ's Wholesale, GFS Marketplace, Sysco, etc.

How's the Sam's Club Discover card's customer service?
Discover consistently has top-rated customer service and it's all US-based. But the bad news is that this card is NOT managed by Discover (GE Capital Retail Bank manages it). That means with the Sam's Club Discover you will NOT get Discover's customer service. GE handles the service side and they have a mixed reputation and that's saying it nicely.

What's the APR?
As of the time of writing, the Sam's Club Discover application listed two tiers of interest rates and the one given depends on the cardholder's creditworthiness – 22.90% or 14.90%.

Both Sam's Club and Discover are top notch companies. If you choose to get their credit card, it would make the most sense to become a Sam's Club Advantage Plus Member because of the higher brackets. If you don't spend much then your rewards will only be around average due to the way the rewards program is set up.
Alternatives for 2015?
This card described below is NOT affiliated with Sam's Club in any way, but you can still use it to pay for purchases at Sam's Club since it is a Discover card.

In my personal opinion, the Discover it card is the best rewards card on the planet. It has two very unique advantages:

  • You get up to 5% cash back at grocery stores, gas stations, home improvement stores, department stores, movies, hotels, airlines, cruises, restaurants and other categories which rotate.
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