The Ultimate Guide to Credit Cards
Monday, May 23, 2022

Costco Credit Card Benefits of 2022

Costco Credit Card Benefits

credit card advice

Eric Bank

Written by: Eric Bank

Eric Bank

Eric Bank has been covering business and financial topics since 1985, specializing in taking complex subject matters and explaining them in simple terms for consumer audiences. In addition to his work on CardRates.com, Eric has appeared regularly on Credible.com, eHow, WiseBread, The Nest, Get.com, Zacks, Chron and dozens of other outlets. A former software engineer, Eric holds an M.B.A. from New York University and an M.S. in finance from DePaul University.

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Edited by: Ashley Dull

Ashley Dull

Ashley has overseen content and public relations on CardRates.com since 2015. She has worked closely with the world’s largest banks and financial institutions, up-and-coming fintech companies, and press and news outlets to curate comprehensive content and media campaigns. Her credit card commentary is featured on national media outlets that include CNBC, MarketWatch, Investopedia, and Reader's Digest, among others.

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Reviewed by: Danielle Spurlin

Danielle Spurlin

Danielle is our Compliance and Operations Manager at CardRates.com. In addition to her bookkeeping and accounting duties, she works directly with our affiliates to ensure our content is accurate, up to date, and meets the high standards of the credit card issuers we partner with.

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Advertiser Disclosure

Costco credit card benefits allow cardmembers like me to earn rewards on purchases in and out of the store. And I have to admit, having the card instills me with a certain loyalty. I can buy 12-packs of paper towels at half a dozen nearby stores, but I always seem to source them from Costco. 

On the other hand, I rarely use the card outside of Costco. I don’t know if that makes me a lemming or an odd duck, but I am sure my Costco Anywhere Visa® Card by Citi belongs in my wallet.

Citibank issues Costco credit cards in the US and Puerto Rico. In Canada, the Capital One Costco Mastercard had the franchise until March 7, 2022, when the CIBC Costco Mastercard replaced the Capital One Costco Mastercard. The Canadian Imperial Bank of Commerce issues the CIBC Costco Mastercard. 

The two Citi Costco Visa cards come in consumer and business versions, and both offer similar benefits.

Benefits of the Costco Anywhere Visa® Card by Citi

Below is a summary of the handsome rewards you get from the Costco Anywhere Visa® Card by Citi. The card also provides lucrative benefits, starting with Costco purchase protection that covers you for repairs or a refund if your item is damaged or stolen within 120 days of purchase. 

CITI® RATING

★★★★★

4.7

OVERALL RATING

  • Discover one of Citi’s best cash back rewards cards designed exclusively for Costco members
  • 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter
  • 3% cash back on restaurants and eligible travel purchases
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • No annual fee with your paid Costco membership and enjoy no foreign transaction fees on purchases
  • Receive an annual credit card reward certificate, which is redeemable for cash or merchandise at U.S. Costco warehouses, including Puerto Rico
  • The standard variable APR for Citi Flex Plan is 15.99%. Citi Flex Plan offers are made available at Citi’s discretion.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
15.99% (Variable)
$0
Excellent

Additional Disclosure: Citi is a CardRates advertiser.

This contactless credit card works seamlessly with digital wallets, helping speed you through the checkout line safely and securely. You can also use Citi Entertainment to get special access to buy tickets to thousands of events, including exclusive experiences and presale tickets for sporting events, concerts, dining experiences, and more. 

Other benefits include Citi Quick Lock, Citi Concierge, and alerts for card activity and potential fraud.

Benefits of the Costco Anywhere Visa® Business Card by Citi

In most respects, the Costco Anywhere Visa® Business Card by Citi is a carbon copy of the consumer version. This Citi Costco Visa card targets small business owners who shop at Costco. 

CITI® RATING

★★★★★

4.7

OVERALL RATING

  • Discover the only business credit card designed exclusively for Costco members
  • 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter
  • 3% cash back on restaurants and eligible travel purchases
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • No annual fee with your paid Costco membership and enjoy no foreign transaction fees on purchases
  • Whether you’re traveling for business or pleasure, enjoy no foreign transaction fees on purchases
  • Receive an annual credit card reward certificate, which is redeemable for cash or merchandise at U.S. Costco warehouses, including Puerto Rico
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
15.99% (Variable)
$0
Excellent

Additional Disclosure: Citi is a CardRates advertiser.

Its benefits include extended warranty protection and Citi Quick Lock that instantly prevents new purchases and cash advances while permitting recurring transactions, payments, and credits to continue without interruption.

The card also provides fraud and account alerts. Citi Concierge gives you around-the-clock access to experts who can help you with your shopping, travel, dining, entertainment, and everyday needs. You can add employees as authorized users, but they must first be Costco members. 

The only significant difference from the consumer card is that this one doesn’t support balance transfers.

Alternative Cards With Comparable Benefits

Perhaps you don’t shop at Costco. Or maybe you do but prefer another card when making a non-Costco purchase. The following three cards are in the same league as the Costco Visa cards, providing similar (or better) rewards and benefits.

Chase Sapphire Preferred® Card Review

at Chase’ssecure website

  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 when you redeem through Chase Ultimate Rewards®.
  • Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
16.24% – 23.24% Variable
$95
Good/Excellent

The Chase Sapphire Preferred® Card offers many travel benefits, including trip delay reimbursement, trip cancellation/interruption insurance, travel accident insurance, and primary rental car insurance coverage. 

The card rewards you with Chase Ultimate Rewards points that you can redeem in several ways. You receive added value when you make an eligible travel purchase through Chase Ultimate Rewards. You also get extended warranty protection, travel and emergency assistance, and lost luggage reimbursement. 

The Chase Sapphire Preferred® Card is among the very best credit card offers available to travelers.

Blue Cash Preferred® Card Review

at the issuer’ssecure website

BEST OVERALL RATING

★★★★★

4.8

OVERALL RATING

  • Earn $350 back after you spend $3,000 in purchases on your new Card within the first 6 months of Card Membership. You will receive the $350 back in the form of a statement credit.
  • Earn 6% cash back at U.S. supermarkets on up to $6,000 per year on purchases (then 1%). Also earn 6% cash back on select U.S. streaming subscriptions.
  • Earn 3% cash back on transit, including U.S. gas stations, taxis/rideshare, parking, tolls, trains, buses, and more. All other purchases earn 1% cash back.
  • $120 Equinox Credit – Use your Blue Cash Preferred Card to pay for Equinox+ at equinoxplus.com and receive $10 in monthly statement credits. Enrollment required.
  • 0% intro APR for 12 months from the date of account opening, then a variable APR applies
  • $0 intro annual fee, $95 annual fee thereafter
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 12 months
N/A
14.24% – 24.24% Variable
$0 intro; $95 thereafter
Excellent Credit

The Blue Cash Preferred® Card delivers a fair amount of benefits for a  reasonable annual fee. Travel perks include rental car insurance and global assistance, while shoppers receive an extra 90 days of return protection on up to $300 per item and $1,000 per calendar year. 

The card brings you American Express Experiences with exclusive access to ticket presales and cardmember-only events in a city near you. You can use Amex Send & Split to send money and split purchases with any other Venmo or PayPal user directly from the Amex App. 

You also get fraud protection, online account management, and Pay It Plan It, which allows you to tap a purchase from the card’s app or split purchase payments at a fixed fee.

Business Advantage Customized Cash Rewards credit card Review

at the issuer’ssecure website

BEST OVERALL RATING

★★★★★

4.6

OVERALL RATING

  • Get a $300 statement credit when you make at least $3,000 in net purchases within 90 days of your account opening
  • Earn 3% cash back on your choice of one of the following six categories: gas stations (default), office supply stores, travel, TV/telecom & wireless, computer services, or business consulting services and 2% cash back on dining on the first $50,000 in combined choice category/dining purchases each year, 1% thereafter
  • Earn unlimited 1% cash back on all other purchases
  • Get 75% more cash back on every purchase when you’re a Preferred Rewards for Business Platinum Honors tier member. That means you’ll earn 5.25% on your selected choice category, 3.5% on dining, and unlimited 1.75% cash back on all other purchases.
  • 0% on purchases for 9 billing cycles from account opening, then a variable APR applies
  • $0 Annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 9 billing cycles
N/A
12.49% to 22.49% Variable
$0
Good

The Business Advantage Customized Cash Rewards credit card from Bank of America offers benefits that should interest small business owners. The card provides a suite of online cash flow management tools for automatic payments, transfers, and downloading transactions into QuickBooks. You can manage your account around the clock with online and mobile banking to keep tabs on all account activity for you and your employees.

The card provides $100,000 of travel accident insurance, emergency ticket replacement, auto rental insurance, lost-luggage assistance, and legal and medical referrals when you’re traveling. You also get $0 liability protection, fraud monitoring, and optional Balance Connect protection against overdrafts, declined purchases, and returned checks. 

The Business Advantage Customized Cash Rewards credit card may be the best credit card for business from BoA.

How Do Costco Credit Cards Work?

The Costco cards are co-branded, open-loop credit cards you can use to shop anywhere. They are Visa cards, the only payment network Costco accepts in its stores. You need a Costco membership to get and keep these cards, which explains why the cards charge no annual fee.

You can apply for a Costco credit card online by providing your membership number, personal information, and financial data, including your total annual income and monthly mortgage or rent payment. You can also add authorized users when applying for the card.

Citi, Costco, and Visa Logos
Citi, Costco, and Visa have partnered to offer two co-branded Costco credit cards.

Citibank, the card issuer, evaluates applications according to its credit standards. The bank does this for all its cards, including the Citi® Double Cash Card and others covered on our Citi credit card review page. The bank will perform a hard credit inquiry when you apply, which will shave a few points off your credit score. 

Citi also reviews your income and debts when assessing your application. You must be 18 and a resident of the US or Puerto Rico to qualify for these cards. The business card requires you to have a business account with Costco.

Upon approval, the issuer will assign you a credit limit based on your annual income and debt. The minimum credit limit is $500, but the card may limit cash advances to a portion of your credit line. 

After you receive approval and activate your card, Costco will automatically bill your membership fee and charge the cost to the credit card.

Each Citi Costco Visa card has a 23-day grace period between the end of the billing period and the payment due date. You’ll avoid interest charges on purchases by paying your entire balance before the grace period ends. There is no grace period for cash advances and balance transfers.

Costco and Citi come down hard on cardmembers who fail to make the minimum payment by the due date. The issuer will slap you with a late payment penalty fee. Even worse, the card will saddle you indefinitely with a penalty APR that is almost double the regular interest rate

In-Store Shopping

When you arrive at the Costco checkout line, you’ll need both your Costco Anywhere Visa Card and your membership card. Costco’s in-store and online shopping rewards are surprisingly modest. The rewards for gas purchases, including those at Costco, are more generous, but only up to the annual cap.

Shopping Outside of Costco

Ironically, Costco credit cards offer better rewards for shopping elsewhere. You can use the cards anywhere merchants accept Visa cards. 

The card provides only 1% cash back on gas purchased at superstores, supermarkets, convenience stores, and warehouse clubs other than Costco or for fuel used for non-automobile purposes. 

Similarly, you won’t collect the restaurant bonus rate on purchases made at bakeries and certain restaurants and cafes inside department stores, grocery stores, or warehouse clubs. Nor will you receive the travel bonus reward rate for purchases at timeshares, campgrounds, bed & breakfasts, or train and commuter travel.

Reward Redemption

Costco has its own ideas about reward redemptions. Virtually all credit cards pay your rewards as you earn them, one month at a time. Instead, the Costco cards pay out your cash back annually once your February billing statement closes. Your reward balance covers transactions that occurred between January through December.

Certain purchases do not earn cash back rewards, including:

  • Balance transfers
  • Cash advances
  • Interest and account fees
  • Items returned for credit
  • Lottery tickets, gaming chips, and similar betting transactions
  • Traveler’s checks, foreign currency purchases, money orders, wire transfers, and similar cash-like transactions
  • Unauthorized charges
  • Use of checks that access your card account

You will receive your cash back as a credit card reward certificate. However, if you’ve accumulated more than $10,000 in cash back, Citi may send you a check or transfer the money electronically. 

You can redeem your reward certificate for Costco merchandise through December 31 of the year the certificate is issued in a single transaction at any Costco store. If you redeem only a portion of your rewards for merchandise, you’ll receive the remainder as cash, a check, or via electronic payment. Only the card owner receives the rewards earned by authorized users.

If you close your card account, you’ll forfeit any rewards not already distributed. You’ll also lose your cash back if you don’t redeem it by December 31.

What Credit Score Do You Need to Get a Costco Credit Card?

Costco markets its cards to consumers with excellent credit. FICO defines an excellent credit score as being between 800 and 850.

FICO Score Needed For Costco's Credit Cards
Citi advises that an excellent credit score is required to get a Costco credit card, which is considered 800 or higher on the FICO scale.

As is often the case, a score above this threshold doesn’t guarantee approval, and a lower score may still receive approval. 

Your credit score is just one factor that Citi uses to decide whether to approve your application. The bank also considers your ability to pay based on your assets, income, and debts. If your credit score is currently below 700, you may want to work on improving it before applying for a Costco credit card. 

You can boost your score by making all payments on time, reducing your debt, and removing mistakes from your credit reports.

How Much Do the Costco Credit Cards Cost?

The annual fee for a Costco credit card is $0. But you’ll have to fork over the money for a Costco membership before applying for the card. The basic Gold Star Membership costs $60 a year and you receive a free household card with this membership. 

You’ll also spend $60 a year to get a Business Membership, which is necessary if you want the Costco Anywhere Visa® Business Card by Citi. You can add employees as authorized users to the card, but each employee must also have a membership.

For $120 a year, you can get a Costco Executive Membership that offers savings on the suite of Costco third-party services and products, such as life insurance. It also provides an annual 2% reward on Costco purchases, separate from the credit card rewards. You’ll qualify for lower costs on services that include check printing, auto buying, roadside assistance. You also receive a monthly edition of Costco Connection magazine.

Do You Get Free Costco Membership With Either of Its Credit Cards?

It’s the other way around. The Costco credit cards have no annual fee, but you’ll have to pay for  a Costco membership before applying for a Costco credit card.

This arrangement begs the question: Is a Costco membership worth the cost? About 90 million Costco members have already voted yes, but if you are on the fence, you may want to consider these factors:

  • You’ll want to live within a convenient driving distance of a Costco store.
  • You may not do enough bulk buying to offset the membership fee if you live alone. You generally need to spend about $600 a year at Costco to break even.
  • You’ll need a vehicle big enough to transport bulk items and a large home to store them.
  • You refill your gas tank frequently and are near a Costco gas station.
  • Ask yourself whether you mind shopping in crowded stores.
  • You need a Visa credit card or cash to shop at a Costco warehouse.
  • You may not be interested in the third-party offerings, such as life insurance.

An executive membership gives you 2% cash back each year, apart from your credit card rewards. You’ll also save money on certain services.

For those who want to shop at Costco but don’t want to be members, you have a few options:

  • Have a member pick up some Costco Cash Cards (a type of gift card) for you. You can use these cards to shop at Costco and Costco.com without a membership.
  • Confine your Costco shopping to online only. However, non-members will pay 5% more for the privilege and don’t have access to lower, store-only prices. Shipping takes three to five days, and you can’t order perishables online.
  • Shop via Instacart. A personal Costco shopper will deliver your groceries if the service is available in your area. Instacart prices are higher than those for members who shop in-store.
  • Shop for Costco items that don’t require membership, such as alcohol, prescriptions, eye exams, and goodies from the Costco food court.

You may save more at your local grocery store if you are a dedicated coupon clipper, as Costco doesn’t accept manufacturer coupons. Also, Amazon.com offers Subscribe & Save that will shave 15% off items, including bulk items, to be delivered automatically at set intervals.

Do Costco Cards Provide Travel Insurance?

The Costco credit cards do not offer travel insurance or other travel benefits. But they do offer cash back rewards when you make eligible travel purchases. In addition, Costco members (not necessarily Costco card owners) can access deals through Costco Travel, where they can buy travel insurance at a discounted price.

You may not receive travel insurance, but a Costco membership affords you access to Costco’s platform for discounted travel deals.

Costco Travel can save you money through deals on flights, hotels, rental cars, cruises, and vacation packages.

The Costco cards are not travel cards. If you are looking for travel benefits, consider the Chase Sapphire Preferred® Card instead. It is a Visa credit card with a moderate annual fee and plenty of travel perks, including travel insurance.

Does the Costco Business Credit Card Report to Your Personal Credit?

The Costco Anywhere Visa® Business Card by Citi reports your payment activity to your personal credit file at Experian. This procedure is not unusual for credit cards aimed at owners of small businesses. 

You benefit from cards reporting your payments to a consumer credit bureau if you adopt creditworthy behavior  —  pay your bills on time, keep your credit utilization ratio below 30%, and remove errors from your credit reports. 

However, this is a moot point for Costco business card owners since an excellent credit score is required. On the other hand, if you own the card and miss payments, you could harm your credit score. 

Are Costco Credit Cards Worth It?

We have already discussed the merits of Costco membership. But a separate question is whether the Costo cards are the best Visa cards for Costco shoppers.

The cards offer mediocre cash back rewards for Costco and Costco.com shopping (except for eligible gas purchases, which provide a better reward rate). They are somewhat more competitive for shopping elsewhere, and their other benefits are limited compared with the alternatives reviewed above.

Costco Storefront
A Costco credit card may be worth it if you regularly shop at the retailer, particularly its gas stations. Image source: Costco.com.

On the positive side, the cards don’t charge an annual fee or a foreign transaction fee. And their cash back rates for eligible gas, restaurant, and travel purchases are reasonable.

If you are a fan of both Costco and Citibank, you may find these cards worth the price of a Costco membership.

Compare Costco Credit Card Benefits to Alternative Options

If you have the excellent credit required by the Costco credit cards, you have access to just about any card on the market. You owe it to yourself to compare Costco credit card benefits with those from competitor cards. 

There’s little downside to owning the cards since they are free (assuming you’d be a Costco member in any event). However, there is an opportunity cost if you use these cards when others would better fit your needs and lifestyle. 

If you frequently shop and fill your tank at Costco, these cards make a lot of sense. If you want travel benefits and don’t enjoy waiting a year to collect your rewards, you can do better by seeking out an alternative credit card.

Advertiser Disclosure

CardRates.com is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation for referrals for many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across CardRates.com (including, for example, the order in which they appear). CardRates.com does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.