Costco Credit Card Review TL;DR: The card_name is a strong no-annual-fee cash back credit card available only to Costco members. It’s especially good if you only want to hold one main credit card and get good cash-back value on many everyday purchases. On the downside, you only get to redeem your earned rewards once per year, and you could potentially earn better rewards from other Cash Back Credit Cards in many purchasing categories. You might choose the Costco Anywhere Visa as your go-to credit card or perhaps a complementary card to other rewards cards in your wallet.
Solid Everyday Cash Back Rewards
You’ll earn cash back with the Costco credit card in the following ways:
- 4% cash back on gas purchases at Costco and gas stations on up to $7000 per year of gas (1% beyond that). You’ll get that same 4% on EV charging also, if you’ve gone the electric vehicle route.
- 3% cash back on restaurant purchases
- 3% cash back on most travel purchases, including airfare, hotels and more
- 2% cash back on Costco purchases in store and on Costco.com
- 1% cash back on all other purchases
No New Cardholder Bonus Offer
There is no opportunity for a new cardholder bonus with this card, so you’ll miss the opportunity to earn one of the nice credit card bonus offers out there, which can range from a quick $200 cash bonus to thousands of travel points, depending on which cards you’re looking at.
Redemption Procedure Gets A Thumbs Down
You only get your accumulated cash back once per year, in February, based upon your earnings in the prior calendar year. In addition, you get a rewards certificate sent to you that you must bring to a Costco store to get your cash back or to use toward your Costco purchases that day.
This is not ideal. First, most people like to have the flexibility to redeem their rewards more than once per year, even if those rewards are fairly small. Second, by forcing you to redeem at a Costco store location, Costco seems to be trying to get you to use your rewards on more Costco purchases. They could just as easily give you those rewards as a statement credit, thus allowing you to put them toward any of your card purchases.
This may be a small quibble. Most people don’t redeem credit card rewards more than once per year anyway, and the procedure that forces you into a Costco store is probably more about making you “feel” the reward (and feel good about it) than it is about forcing you to buy more from Costco. (The truth is you will probably buy plenty more from Costco than the amount of your rewards anyway, or you wouldn’t have paid for a Costco membership in the first place, amiright?)
The Costco Anywhere Visa also:
- Has no foreign transaction fees on purchases made outside of the United States.
- Doubles as your Costco ID Card, so no need to show both cards at the store.
- Has no annual fee beyond what you’ve already paid to be a Costco member.
A Closer Look at the Rewards
Now let’s see just how strong those cash back rebates are when compared to other credit cards on the market.
- 4% cash back on gas purchases is very strong. Note that the 4% rebate is only on Costco gas purchases or gas station purchases, not on purchases from supermarkets or other warehouse-type stores. The location where you buy the gas must be “coded” as a gas station when the transaction is reported in order to get the 4%.
- 3% back on restaurants and travel is also very competitive.
- 2% cash back at Costco is OK, but with many other cards on the market that offer 2% cash back on everything, it’s surprisingly un-generous here.
- 1% cash back on all other purchases is standard for many cards, but with other cards on the market giving 2% cash back on ALL purchases, you might want to snag one of those and use it on purchases where this card is not giving you at least 2%.
Overall, the card_name is a generous rewards credit card for people that want solid value without having to think too much about credit card rewards. If you don’t want to juggle multiple cards, the Costco credit card is a good choice. Or, if you don’t mind a little juggling, you might pair it with other good cash-back cards on the market to maximize the rebates you get on your card purchases.
Author: Adam Jusko