WARNING: Are you Sam’s Club member? Are you considering applying for the Sams Club credit card? On the surface it may appear to be a good deal, but once you dig a little deeper and review it, you will start to realize this will probably hurt your wallet more than it will help.

In times like these, we’re all looking to cut back out budgets. One way to do that is shopping at wholesale clubs such as Sam’s Club and Costco. Sometimes these can be great places to save money, especially if you have a big family or a lot of people to buy for. But behind their low-margin steals and deals, these stores turn to other areas to pick up the slack and make big profits. One of these areas is their credit card department.

At most stores you can whip out your Visa or American Express and pay no problemo… this is not the case when it comes to Sam’s Club. As you probably already know, they offer very limited payment options. One of those, of course, is the Sams Club charge card, which they strongly encourage you to apply for.

The Truth About Sams Club Credit Card
There may be no annual fee, but just because something is free, it doesn’t mean you should take it. First of all, applying for the card will result in a “hard pull” credit inquiry – these types of inquiries can negatively affect your credit score. Secondly, some credit experts recommend against store-only cards in general. The reason? Because they generally tend to be opened by people with lower credit scores who cannot get a normal charge card and/or by people who act on impulse and signup for it during checkout. In turn, many do not want a store card on their credit file because they feel its appearance “cheapens” their creditworthiness.

When you add in the sky-high interest rate, the lack of cash back, and the fact it can’t be used outside of Sam’s Club/Wal-Mart… it’s hard to justify getting one of these. But is the alternative they offer through Discover any better?

The Truth About Sams Club Discover
Make no mistake about it, Discover is a great creditor. In fact, they are my favorite (and to be completely transparent, this website has a material connection with Discover because it's a member of their affiliate advertising network). They have excellent customer service and offer great benefits. And nowadays, they are accepted at nearly all the same places as Visa and MasterCard. But when it comes to this card, the cash back isn’t the best. You get 3% on the first $500 spent annually, but after that, it’s a dismal 1/2% to 1% cash back. And let’s face it, we are all spending more than $500 a year on our credit cards. Being that all cards nowadays give 1%, these rewards are just average.

The Secret To Getting 5% Cash Back
Ever wonder why Sam’s Club accepts Discover, but not Visa? Well, the two companies have a special agreement, where Discover gets exclusive rights. Although the store would love for you to sign up for their Sams Club credit card (because they get a cut from it), the truth is that you can use any card issued by Discover for payment at their stores. So why not get one that gives you better rewards and benefits instead?

By far the best deal out there right now is a card from Discover called More. And that is exactly what it gives you… more cash back! You can get a whopping 5% cash back on a wide variety of categories including gas, groceries, restaurants, clothes, airfare, home improvement stores, and many others. On top of that, there is absolutely no annual fee. Check out the Discover More review to learn more.