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Walmart Credit Cards vs Target RedCard: Which is the best for your wallet?

Store credit cards don't usually have a very good reputation. Often they charge really high APRs and the perks don't add up to provide good value for cardholders. But the exception might be cards from Target and Walmart, which give loyal customers up to 5% back in rewards on eligible purchases at the store. You'd be hard pressed to find another credit card that offers such a high rewards rate, as big box stores are usually excluded from the list of eligible stores where you can earn high cash back when you do your grocery shopping. (Read more about CNBC Select's round-up of the best credit cards for groceries.)

Walmart offers two credit cards: the cobranded Capital One® Walmart Rewards Mastercard® and the private-label Walmart Rewards Card. Target offers customers the Target RedCard™.

Both retailers' credit cards have no annual fee and offer a range of perks. But you still may wonder if these cards are worth all the hype?

Below, CNBC Select breaks down the basics of each card from rewards to fees to added perks.

Overview

Capital One® Walmart Rewards Mastercard® Walmart Rewards Card Target RedCard
Annual fee$0$0$0
Regular APR17.99% to 26.99% variable26.99% variable24.65% variable
Rewards5% 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; 1% back everywhere else5% back at Walmart.com, Walmart app, Walmart Grocery Pickup and Delivery; 2% back at Walmart stores, Walmart and Murphy USA fuel stations5% discount at checkout on most purchases in-store and at Target.com
Welcome bonus5% back on in-store purchases when using Walmart Pay for the first 12 months after approval (after, earn 2%)5% back on in-store purchases when using Walmart Pay for the first 12 months after approval (after, earn 2%)None
Where the card is acceptedWalmart, Walmart.com, Walmart app, Walmart and Murphy USA fuel stations and anywhere Mastercard is acceptedWalmart, Walmart.com, Walmart app, Walmart and Murphy USA fuel stationsTarget and Target.com
Number of stores per retailer4,500+4,500+1,800+

Rewards

The Walmart and Target credit cards offer competitive rewards programs. Here's a breakdown of what to expect.

Capital One® Walmart Rewards Mastercard®: 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; 1% back everywhere else.

Walmart Rewards Card: 5% back at Walmart.com, Walmart app, Walmart Grocery Pickup and Delivery; and 2% back at Walmart stores, Walmart and Murphy USA fuel stations.

Target RedCard: 5% discount at checkout on most purchases in-store and at Target.com. Read our Target RedCard review for exclusions.

Winner: Target RedCard — you instantly receive a 5% discount at checkout, which applies both in-store and online. The Walmart cards earn a lower 2% back in-store.

Redemption

Rewards you earn with either Walmart card can be redeemed 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.

There are no redemption options for the Target RedCard since you instantly receive a 5% discount at checkout.

Winner: Tie. It depends on how you prefer to redeem rewards. If you don't want to deal with the hassle of cashing in your points, the Target RedCard is the best choice. But if you want to use rewards for travel or gift cards, the Walmart cards provide more options.

Where can you use the cards

The Walmart Rewards Card and Target RedCard can only be used at Walmart and Target properties, respectively. If you want a credit card that can be used everywhere, the Capital One® Walmart Rewards Mastercard® can be used anywhere Mastercard is accepted.

If you prefer to do your shopping in-store, Walmart has more locations you can visit (4,500+) versus Target (1,800+), making it more accessible for shoppers.

Winner: Walmart for two reasons: You can benefit from over 2,700 more locations than Target, and the Capital One® Walmart Rewards Mastercard® can be used anywhere Mastercard is accepted. However, it's a tie if you prefer online shopping.

Welcome bonus

Both Walmart cards offer 5% back on in-store purchases when using Walmart Pay for the first 12 months after approval (after, earn 2%). This is a nice welcome bonus, but keep in mind you must pay via Walmart Pay to earn extra rewards. Target currently isn't offering a welcome bonus.

Winner: Walmart credit cards since the Target RedCard has no welcome bonus.

Added benefits

The Capital One® Walmart Rewards Mastercard® 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

The Walmart Rewards Card doesn't offer these perks.

Target RedCard holders can benefit from:

  • Free two-day shipping on hundreds of thousands of items from Target.com — without the $35 minimum purchase amount required for non-cardholders
  • 30 additional days to return purchases beyond the standard 90-day return policy
  • 10% off a purchase every account anniversary year, when you're signed up for Target marketing emails
  • Exclusives, such as special items, gifts and offers throughout the year

Winner: Capital One® Walmart Rewards Mastercard® holders receive the most added perks.

Fees

None of the cards have an annual fee, but they have a wide range of APRs. The Walmart Rewards Card has a high 26.99% variable APR, and the Target RedCard has a slightly lower 24.65% variable APR, which is standard among store cards.

The Capital One® Walmart Rewards Mastercard® offers the chance for an even lower APR at 17.99% to 26.99% variable, depending on your creditworthiness.

Winner: Capital One® Walmart Rewards Mastercard® since you have the chance for a lower APR.

Bottom line

Frequent Walmart and Target shoppers can see benefit from using one of these cards responsibly. If you prefer one store over the other, than the best card for your needs is pretty clear. However, if you shop at both Walmart and Target, you may wonder which store's card is the best.

If you want to maximize rewards at one of the retailers, the Target RedCard is the best choice since the 5% discount automatically applies to eligible purchases both in-store and online. Plus you don't have to worry about redeeming rewards.

If you want more flexibility with using your credit card, the Capital One® Walmart Rewards Mastercard® or Walmart Rewards Card are better options with over 2,700 more physical locations and the ability to redeem rewards for various options. And the Capital One® Walmart Rewards Mastercard® can be used anywhere Mastercard is accepted.

Regardless of the card you decide to open, make sure you always pay on-time and in full. Any lingering balances will be hit with high interest rates negating any savings you earn with a discount or rewards.

Information about the Capital One® Walmart Rewards Mastercard®, Walmart Rewards Card, and Target RedCard 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.