Walgreens (WBA) is launching a new credit card program, with two cards focused on rewards for pharmacy purchases as well as swipes and taps for other health and wellness bills.
One card is a Walgreens branded card, the other is a MasterCard. The latter has lower rewards thresholds, but a larger list of opportunities for rewards.
That list includes gyms, spas, grocery stores, sporting good stores, pharmacies, health care providers, salons, golf courses and country clubs. In addition, the card can be used for veterinary visits and pet stores, medical equipment purchases and counseling services. The rewards return 3% Walgreens Cash rewards.
Meanwhile, the company-branded card serves as a way to entice loyal customers, with 10% rewards on store-branded products and 5% on other items and pharmacy purchases. And there is no limit to rewards earned, according to Maria Smith, vice president of payments & financial services at Walgreens.
"Most credit cards reward customers for what they buy, not how they live. We aim to change that by focusing on a product that rewards personal health and well-being choices," Smith told Yahoo Finance.
"We're rewarding on categories that a lot of cards have not in the past - a provider or a health care class. Not just grocery, that's usually where every other product sits. We are very unique in that we are providing a longer list of health and well-being choices," Smith added.
While the focus is on health and wellness, there is no way for the store to disallow unhealthy products — like chips and sodas — being purchased with the cards from qualifying for rewards, Smith said.
"While we can't make choices for our customers, they can personalize their health and well-being choices and still be able to earn rewards to use on healthy choices," Smith said.
The new program is being launched in partnership with Synchrony Financial (SFY), one of two companies known to have more flexible lending practices.
Alberto Casellas, executive vice president and CEO of Health and Wellness at Synchrony, told Yahoo Finance the company is excited to boost its health care presence. He hinted at the card being an avenue to manage costly health care bills.
The partnership with Walgreens gives consumers another option "to get the care that they need, when they need it," with "a flexibility of options for payments," Casellas said.
The idea builds off loyalty cards, which pharmacies and grocery stores have leaned on to learn consumer habits for years. Other industries have also picked up on the idea to marry rewards to loyalty - often seen in the hospitality sector - but this new program is the first in health care.
Health care is by far one of the biggest industries in the country, accounting for more than 17% of U.S. GDP. It's also one of the largest sources of personal bankruptcy.
This is just the start of other ideas Walgreens is mulling — including a MasterCard debit card in the fall, Smith said.
The application process is online and in-store, and the payments can be used for both online and in-store purchases.
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