By Adam Jusko, ProudMoney.com, firstname.lastname@example.org
The Costco Anywhere Visa is a cash back credit card only offered to Costco members. It is issued in partnership with Citibank.
Cash Back Formula Explained
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)
- 3% cash back on restaurant and travel purchases
- 2% cash back on Costco purchases
- 1% cash back on all other purchases
There is no opportunity for a signup bonus with this card, so you don’t have the opportunity to earn a quick $100 or $200 upfront like you do with many other cash back cards.
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.
We don’t like this. 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 subtly 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.
For the most part, this is a small quibble. Most people don’t redeem more than once per year, 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, pretty much the best gas rebate you’ll find today. (The PenFed Rewards Visa offers a points program that works out to about a 4.25% reward on gas, slightly better.) Note that the 4% rebate is only on Costco and gas station purchases of gas, 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, better than most other rebate cards. (One card in particular that meets or beats this card in these categories is the Uber Visa, which offers 4% on restaurants and 3% on travel.)
- 2% cash back at Costco. Normally we would say this is not a big deal. After all, there are a number of cards on the market that give 2% cash back on all your purchases. However, Costco only accepts Visa at its stores (though other cards online), and we don’t know of any mainstream Visa cards that offer 2% rebates.
- 1% cash back on all other purchases. Boo! No reason to use this card for any other purchases.
Overall, the Costco Anywhere Visa is a strong cash back credit card that many Costco customers will love. Ideally, however, you should pair it with a 2% rebate card like the Citi Double Cash Mastercard or PayPal Cashback Mastercard in order to maximize the rewards you receive on purchases that would otherwise give you just 1% with the Costco card.