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Costco vs. Walmart: Which credit card is the better choice?

Costco and Walmart both offer discounts with the ability to maximize savings when you open one of the retailer's co-branded credit cards, but which store has the best option?

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Whether you're looking to stock up on essentials or order curbside pickup for groceries, you may shop at Costco or Walmart.

Both stores are a staple in Americans' lives and have loyal shoppers who are looking to buy in bulk and benefit from everyday low prices.

Costco offers the Costco Anywhere Visa® Card by Citi, whereas Walmart offers two cards: the Walmart Rewards Card and the Capital One® Walmart Rewards™ Card.

The cashier will likely ask you at checkout if you want to apply for a card, and you may even receive a same-day discount if you open one. This can be tempting, but you should consider the long-term benefits of the cards before applying.

Below, CNBC Select breaks down the basics of each card, from membership requirements and fees to rewards and added perks. For our comparison, we'll focus on the consumer cards mentioned above, though there are business versions available.

Costco vs. Walmart cards

  • Membership requirements
  • Rewards
  • Fees
  • Added benefits
  • Bottom line

Membership requirements

The Costco Anywhere Visa Card requires you to be a Costco member. Membership starts at $60 for Gold Star and doubles to $120 for Gold Star Executive. It doesn't matter which level of membership you have, though you'll need to maintain a current Costco membership in your name (not a family member's) as long as your card is open. If you cancel your Costco membership at any time, your card will also be canceled.

There are no membership requirements for the Walmart Rewards Card and Capital One Walmart Rewards Card. Take note, you can only use the Walmart Rewards Cards at Walmart-owned properties, which includes Walmart and Murphy USA fuel stations.

Rewards and redemption

The Costco and Walmart cards both offer competitive rewards when it comes to shopping at the brand, as well as rewards in travel and dining. Here's the breakdown:

  • Costco Anywhere Visa Card: Earn 4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all other purchases from Costco and Costco.com; and 1% cash back on all other purchases. There is no welcome bonus.
  • Walmart Rewards Card: Earn 5% back at Walmart.com, Walmart app, Walmart Grocery Pickup and Delivery; and 2% back at Walmart stores, Walmart and Murphy USA fuel stations. New cardholders also earn 5% back on in-store purchases when using Walmart Pay for the first 12 months after approval (after, earn 2%).
  • Capital One Walmart Rewards Card: Earn 5% back at Walmart.com, Walmart app, Walmart Grocery Pickup and Delivery; 2% back at Walmart stores, Walmart and Murphy USA fuel stations, restaurants and travel; and 1% back everywhere else. New cardholders also earn 5% back on in-store purchases when using Walmart Pay for the first 12 months after approval (after, earn 2%).

The Costco card has a rewards program geared toward travel and food, offering more cash back on those purchases compared to Costco purchases. And apart from the rewards program, which is uncommon for a co-branded card, its 2% cash back on Costco purchases is still a good offer.

Looking at how rewards can be redeemed, the Costco card has a major setback. Cardholders receive an annual reward certificate once a year after their February billing statement closes. This can make it hard if you don't live near a Costco warehouse. (Learn more about how to redeem Costco credit card rewards.)

In comparison, both Walmart cards earn the most rewards on Walmart purchases. However, there's an important distinction — 5% back only applies to Walmart.com, Walmart app, Walmart Grocery Pickup and Delivery, not on in-store Walmart purchases or transactions made at Walmart and Murphy USA fuel stations (these transactions earn 2%).

Walmart cardholders can redeem rewards at any time and for any amount. Redemption options include travel, gift cards, statement credit and the ability to cash in points during online checkout at Walmart.com.

Winner: The Costco card comes out ahead on gas, travel, dining and Costco purchases. Meanwhile the Walmart cards are simply the best for fans of the retailer. But if you want a card with flexible rewards, the Walmart cards beat the Costco card.

Fees

Annual fee

All cards have no annual fees, though membership is required for the Costco card.

Special financing and APR

The Costco card and Walmart cards don't offer any intro 0% APR periods. For the Costco card, all purchases and balance transfers will incur a standard 15.24% variable APR. There is a 26.99% variable APR for the Walmart Rewards Card. The Capital One Walmart Rewards Card offers a range of APRs at 17.99% to 26.99% variable, but even the lowest interest rate is higher than the Costco card.

Foreign transaction fee

The Costco card and Capital One Walmart card both have no foreign transaction fees, which saves you the typical 3% fee other cards may charge. However, the Walmart Rewards Card is a store card, so you can't use it outside of Walmart-owned properties.

Winner: All cards have no annual fee, but it's a tie between the Costco card and Capital One Walmart card for traveling outside the U.S. When it comes to the interest you may incur, the Costco card is the best option with the lowest APR.

Added benefits

The Costco Anywhere Visa Card offers:

  • Travel and emergency assistance
  • Worldwide travel accident insurance
  • Worldwide car rental insurance
  • Extended warranty coverage
  • Damage and theft purchase protection
  • Presale ticket access and preferred seating with Citi Entertainment

The Capital One Walmart Rewards Card offers:

  • Extended warranty protection
  • Car rental insurance
  • Travel accident insurance
  • Baggage delay insurance
  • Trip cancellation/trip protection insurance
  • Emergency roadside assistance
  • Travel assistance services
  • Price protection
  • Capital One experiences, which offer special access to culinary, music and sporting events

The Walmart Rewards Card doesn't offer these perks.

Winner: The Capital One Walmart Rewards Card offers a majority of the same perks as the Costco card, plus a few more.

Bottom line

If you frequently shop at either Costco or Walmart, one of the store's co-branded cards can be a great addition to your wallet — especially since there's no annual fee for all three. These cards have benefits that serve different types of consumers, but ultimately the best card for your wallet depends on what you plan to use the card for.

Here's a simple breakdown that can help you choose the best card:

  1. If you're a Costco member that travels, owns a car and/or enjoys dining out, opt for the Costco card.
  2. If you often shop at Walmart (online or in-store), either Walmart card is a good choice.
  3. If you fall into both categories, you may want to consider opening a card from both Costco and Walmart.

Consumers who use a Costco or Walmart credit card can benefit from increased rewards and perks on their purchases at the retailers and other merchants. But if you shop at Costco using a family member's membership and don't want to open your own, consider alternative cards for Costco.

And if you primarily shop at Walmart online, you can earn the same rewards rate (2%) with other cash-back cards, like the Citi® Double Cash Card (2% cash back: 1% on all purchases and an additional 1% after you pay your credit card bill).

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Information about the Citi® Double Cash Card, Capital One® Walmart Rewards™ Card and Walmart Rewards™ Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.