Much of the recent press about the new Sam’s Club MasterCard has focused on the technology in the card aimed at fraud prevention.
It is big news that Sam’s Club is the first American retailer to use EMV chip technology, but we’re more impressed with the generous new rewards package, which represents a significant improvement over the old card.
The credit card, available June 23, offers 5% cash back on the first $6,000 (!) of gasoline purchases you make, 3% on dining and travel and 1% on everything else. This card is available to Sam’s Club members only, but can be used wherever credit cards are accepted.
While there is a cap on how much cash back you can earn, you’re not likely to approach it, unless you’re a business owner. You can earn up to $5,000 cash back in a year.
To earn that much in rewards, for example, you’d have to spend $250,000 on travel and restaurants annually.
The old Discover-branded card offered 2% cash back on all purchases for Advantage Plus club members (up to 1% for non-Plus members). However, you didn’t earn the full 2% until you spent $10,000. Before that, you earned anywhere from 0.25% to 1.75%.
How does this rewards program compare?
The BankAmericard Cash Rewards card, for example, pays 2% at grocery stores and 3% on gas, but only for the first $1,500 in combined purchases each quarter. It also pays an unlimited 1% on all other purchases.
Like the Discover card, the new Sam’s Club MasterCard will carry no annual fee, although you still have to pay the warehouse store’s annual membership dues: $45 for the basic Savings and Business memberships and $100 for Sam’s Plus.
The APR is unchanged on the new card compared with the old: either 14.9% or 22.9%.
Existing Sam’s Discover cardholders will receive a replacement MasterCard between July 1 and Aug. 30, although the old card will remain valid until Feb. 28, 2015.
One thing that doesn’t impress: how redemption works.
Sam’s will send you a check once a year in February, and you must bring the check to a Sam’s Club location to cash it within 180 days of its issue.
As for security, the new card will include both the traditional magnetic strip as well as an embedded electronic chip for added security.
Chip-enabled technology, which is common in Europe and other foreign countries, is considered more secure than the magnetic strips found on most cards in the U.S., which can be easy to counterfeit because they contain a single, static security code. Chips, by contrast, generate a different security code for each transaction.
Sam’s Club is the first mass retailer in the U.S. to implement chip-enabled technology. It began integrating chip technology seven years ago, and all of its locations already have chip-enabled sales terminals.
The technology has so far failed to catch on in the U.S., largely because merchants have been reluctant to make the investment to install chip-based readers to replace their existing boxes.