The Costco Anywhere Visa is great for members as it gives them extra benefits like cash back on gas, groceries, and more. Costco now partners with Visa and Citigroup, allowing for even greater Costco credit card rewards. If you are already a Costco member, the Costco credit card is no-brainer.
The New Costco Visa at a Glance
- The new Costco credit card offers 4% cash back on your first $7,000 in gas purchases each year, up from 3% with the old version of the card.
- The new credit card for Costco offers 3% back on travel and dining purchases, including international dining! The older American Express version of this card, on the other hand, offered just 2% and excluded restaurants abroad.
- All other Costco purchases made with the new card will earn 2%, an improvement from the 1% back on all purchases offered by the old version of the card.
Additional Costco Credit Card Benefits
- 1% cash back on other purchases.
- This card comes with no annual fee, although you do have to spring for an annual Costco membership to qualify.
- You can redeem your rewards for shopping vouchers to use at Costco.
- Damage and theft protection. You may be refunded or covered for repairs if items you purchased with the card are stolen or damaged within 120 days of purchase.
- Extended manufacturer warranties.
- No foreign transaction fees when you use the card abroad.
- You can use the card in place of your Costco membership ID.
Verdict: The Perfect Card for People Who Already Shop at Costco
If you live near a Costco and already have a membership, the new Costco credit card is an absolute no-brainer. While it doesn’t come with a signup bonus, the new credit card for Costco does offer an amazing 4% cash back on your first $7,000 spent at gas stations worldwide, plus 3 percent back on dining and select travel purchases, and 2 percent back on all other Costco purchases. As a Visa card, this card can also be used anywhere Visa is accepted. For all purchases that fall outside of one of the “bonus categories,” you’ll earn the standard 1 percent cash back. No matter how you look at it, that isn’t bad at all.
If you already have a Costco membership, which runs around $60, and shop there quite a bit already, you could save a ton of money by signing up for the new Costco card. If you drive a lot and manage to max out the gas benefit, for example, you can score an easy $280 in cash back every year. And if you load up on groceries and essentials at Costco, you could easily earn a whole lot more.
As an example, let’s say you spend around $1,000 on groceries, toiletries, and personal care items at Costco each month. At the end of the year, you’ll have another $240 in rewards to spend – and all for buying items you would have purchased anyway. That’s the beauty of using the Costco rewards credit card.
Points to Consider
While there are many Costco credit card benefits, the new Costco Visa won’t be perfect for everyone. If you don’t live near a Costco or have no desire to buy in bulk, for example, you wouldn’t benefit much from this card.
Second, you have to visit your local Costco to redeem your rewards. If you don’t mind the extra step, then that might not be a big deal. However, this is far less convenient than most other rewards credit cards that allow you to redeem your rewards online.
Who this Card is Best For:
- Costco shoppers who want to earn Costco credit rewards.
- People who have thought about joining Costco in the past, but needed an incentive.
- Those who are flexible in how they redeem their rewards.
Who Should Pass:
- People who want to earn rewards for travel.
- Those who want to earn a signup bonus.
- Anyone who doesn’t shop at Costco.
How Does It Compare to Other Grocery Cards?
To see how the new credit card for Costco might compare to other cards you would use at the grocery store, we compared its benefits to the Blue Cash Preferred® Card from American Express. Here’s what we found:
|New Costco Visa Card||Blue Cash Preferred® Card from American Express|
|Annual Fee||$0, but you do need a $55 membership||$95 (See Rates & Fees)|
|Intro Bonus||$0||$250 after you spend $1,000 within the first 3 months. Terms Apply.|
|Earnings Structure||Earn 4x points on $7,000 in gas spending, 3x points on dining and select travel purchases, 2x points at Costco and Costco.com, and 1x points on all other purchases||6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 6% Cash Back on select U.S. streaming subscriptions. 3% Cash Back at U.S. gas stations. 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more. 1% Cash Back on other purchases. Terms Apply.|
|Rewards Options||Redeem points for Costco vouchers||Earn statement credits you can use anywhere|
As you can see, the Blue Cash Preferred® Card from American Express comes out ahead in several respects. First, it offers a full 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). And second, it offers a welcome bonus.
Lastly, the Blue Cash Preferred® Card from American Express comes out way ahead in terms of flexibility. Unlike the Costco card that offers the most points when you buy gas and groceries at Costco stores, the Blue Cash Preferred® Card from American Express lets you earn the “extra points” no matter where you spend your money. If you like to shop at several stores or don’t like going to Costco every time you need gas or groceries, this flexibility can be extremely important.
The new credit card for Costco, on the other hand, looks slightly better if you spend a ton of money on gas every month and stand to benefit from earning 4 percent back in that category. Second, it doesn’t charge an annual fee at all – unless, of course, you count the Costco membership, which you need to purchase anyway if you already shop there. The Blue Cash Preferred® Card from American Express, on the other hand, does charge a $95 annual fee (See Rates & Fees). If you’re fee-averse, you may want to opt for Costco credit rewards using the Costco card.
Best Strategy with the Costco Credit Card: Pair It with the Blue Cash Preferred® Card from American Express
If you spend a ton of money at U.S. gas stations and U.S. supermarkets but don’t want to be tied down to Costco for all of your grocery spending, you could really benefit if you signed up for both the Blue Cash Preferred® Card from American Express and the new Costco credit card.
To maximize both cards, you could:
- Use your Costco credit card for toiletries and household essentials for 2 percent back, plus earn 4 percent back on your first $7,000 in gas station purchases.
- Use your Blue Cash Preferred® Card from American Express to earn 6% for your first $6,000 in U.S. supermarket (then, 1%) spending at non-Costco stores each year, then switch your grocery shopping to Costco to earn 2 percent back after that.
- Use your Blue Cash Preferred® Card from American Express to earn 3 percent back at U.S. gas stations after you have maximized the Costco gas benefit.
- Use your Costco credit card on dining and travel purchases to earn 3 percent back.
By using both cards in their respective “bonus categories,” you can earn a lot more cash back over the course of a year. Just remember, your Costco credit rewards can only be used at Costco stores. Statement credits from American Express, on the other hand, can be used to cover nearly any expense.
Blue Cash Preferred® Card from American Express
Want Flexible Rewards? Consider This Card Instead
If you want rewards you can redeem a number of different ways, it might be smart to get a travel card instead of, or in addition to, your new Costco credit card. Among flexible travel credit cards, the Chase Sapphire Preferred® Card is one of the most popular options.
With this card, you’ll only earn 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases. However, you’ll also earn a huge signup bonus! Plus, you can redeem your rewards in several ways depending on your needs.
As one of their most lucrative options, Chase Ultimate Rewards points transfer at a 1:1 ratio to several popular airline and hotel loyalty programs including Southwest Rapid Rewards, British Airways Executive Club, United MileagePlus Explorer, Marriott, IHG, and Hyatt. If you’re heavily involved in one of these travel programs already, signing up for this card can help you bring your rewards to the next level.
If you’re overwhelmed with all those transfer partners, you can redeem your points for travel directly through the Chase Ultimate Rewards portal for 25% more value. While that may sound daunting, it’s actually rather easy. Booking through the Chase travel portal is a lot like booking travel through Expedia; after you enter your trip details, you’ll be presented with a list of options to choose from.
Lastly, you can redeem your points for cash back or high-value gift cards at a rate of one cent per point. If you’re scared of getting stuck with points you can’t use, this is one option to get excited about. If you get the Chase Sapphire Preferred® Card to earn points for travel but your travel plans fall through for some reason, you can rest assured that your points are good for cash back as well. And, who can’t use cash back?
If you want to learn more about the Chase Sapphire Preferred® Card, you can read our full review here.
If you are a Costco enthusiast and spend a ton of money at the store already, you’ll want to look into the new Costco credit card to maximize your rewards. With 4x points on gas, 3x points on travel and dining, and 2x points on Costco purchases, you can score a ton of easy cash back just by using your card and paying it off every month.
However, the new credit card for Costco doesn’t have to be your only credit card. With many other rewards credit cards on the market, you can rack up even more points and miles with some basic planning and a simple strategy.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
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