credit card advice
Although often mocked for the super-sized supplies stocked on pallets instead of shelves, warehouse clubs and their voluminous products can be a huge blessing to the budgets of large families and small businesses alike.
One of the most popular warehouse chains is Costco, which sports over 740 locations around the world, more than 500 of which are in the US.
But while consumers may love Costco’s copious quantities and cost-per-ounce prices, the chain’s credit card policy definitely leaves a little something to be desired.
Only Visa® Network Credit Cards Are Accepted at Costco
So, what’s the big beef with using a credit card at Costco’s warehouse stores? In short, Costco only accepts cards that operate on the Visa credit card network.
More expansively, Costco has an exclusive contract with Visa that prohibits the use of any other credit card networks, including Mastercard, Discover, and American Express. If you want to use a credit card to make purchases at Costco, you’re going to need one with a Visa logo.
This single-network credit card policy isn’t new for the big-box retailer, either. Until the recent switch to Visa, Costco had a similar contract with American Express that limited card use to that network.
The exclusivity does seem to be limited to credit cards alone; there don’t appear to be any restrictions on debit card networks, meaning you could use a Mastercard debit card to make a Costco purchase (or one from any other network).
Costco accepts all Visa cards, as well as cash, checks, debit/ATM, EBT and Costco Cash Cards. — Costco
Of course, the key distinction to point out here is that Visa is a credit card processing network, not a credit card issuer. Visa only processes the transactions — the issuing bank does everything else.
For example, the Chase Freedom® card operates on the Visa network, but it is issued by Chase bank. It’s Chase that holds the credit line, dictates the rates and fees, and determines the purchase rewards. Bills are sent from Chase — and cardholders make their payments to Chase.
This means that while Costco’s policy limiting accepted cards to the Visa network may limit your options, it doesn’t restrict them as much as you might think. Visa has a wide range of bank partners that issue cards on the Visa network, including Costco’s own co-branded credit card.
The Top 7 Visa® Credit Cards to Use at Costco
When considering the best credit card to use for your Costco purchases, the biggest decision will likely come down to what you want to do with the rewards you earn.
If you want to maximize the value of what you earn, points rewards credit cards are usually the way to go. Those who don’t mind rewards that are only good at Costco can get decent value out of the co-branded card, but an unlimited cash back card will generally have the most redemption flexibility.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
18.24% - 25.24% Variable
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- Named "Best Premium Travel Credit Card" for 2018 by MONEY® Magazine
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
19.24% - 26.24% Variable
Given that Costco doesn’t fall into either card’s bonus categories, the Chase Sapphire Preferred® Card and its big sibling, the Chase Sapphire Reserve®, only offer 1X Ultimate Rewards® points per dollar spent.
That said, one Ultimate Rewards® point can easily be worth more than its cash-back value. Indeed, the expert valuation of Ultimate Rewards® sets them at 2.1¢ per point — and smart transfers could boost that value up to as much as 4¢ per point.
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 17.24-25.99%. Balance transfer fee is 3% of the amount transferred, $5 minimum
- Unlimited 1.5% cash back on every purchase - it's automatic
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
- Free credit score, updated weekly with Credit Journey℠
0% Intro APR on Purchases 15 months
0% Intro APR on Balance Transfers 15 months
17.24 - 25.99% Variable
On pure cash back rewards rate alone, the Chase Freedom Unlimited® would rank below the co-branded Costco credit card, as the Freedom Unlimited® only offers 1.5% cash back on purchases.
However, if you happen to own a credit card that earns Ultimate Rewards® points, you can turn your Freedom Unlimited® cash back into points, effectively earning unlimited 1.5X Ultimate Rewards® points per $1 spent, which gives you an estimated 3.2¢ to 6¢ per-point value.
The Costco Anywhere Visa® offers one of the highest flat cash back rewards rates for Costco purchases, providing 2% cash back at Costco and Costco.com. While the card itself has no annual fee, you’ll need to be a paid Costco member to apply for the card.
- Earn 4% cash back on gas station purchases
- Earn 3% cash back at restaurants and on qualifying travel-related purchases
- Earn 2% cash back on Costco & Costco.com purchases
Perhaps the biggest downside to the Costco Anywhere Visa® is that its rewards can only be redeemed toward Costco purchases. Additionally, you’ll need to retain your Costco membership to keep your card — and to redeem your rewards.
at Wells Fargo'ssecure website
- Earn a $200 cash rewards bonus after spending $1,000 in the first 3 months
- Earn unlimited 1.5% cash rewards on purchases
- Enjoy 1.8% cash rewards on qualified mobile wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from account opening
- No category restrictions or sign ups and cash rewards don't expire as long as your account remains open
- Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Cash Wise Visa® Card
- 0% Intro APR for 12 months on purchases and balance transfers (fees apply), then a 16.24%-28.24% variable APR; balance transfers made within 120 days qualify for the intro rate and fee
0% for 12 months
0% for 12 months
The Wells Fargo Cash Wise Visa® Card offers a simple, no-fuss unlimited 1.5% cash back on every purchase, everywhere the card is accepted — Costco included. Cash back is redeemed for a straightforward statement credit equal to the face value of 1.5¢ per dollar spent.
- One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases for 15 months; 15.24%-25.24% variable APR after that
- 0% intro APR on balance transfers for 15 months; 15.24%-25.24% variable APR after that; 3% fee on the amounts transferred within the first 15 months
- Pay no annual fee or foreign transaction fees
0% for 15 months
0% for 15 months
15.24% - 25.24% (Variable)
The Capital One® Quicksilver® Cash Rewards Credit Card offers the same basic 1.5% cash back as some of our other options, with easy redemption for a statement credit that gives an actual earnings rate of 1.5¢ per dollar spent. While the signup bonus isn’t as robust as that of the Wells Fargo card, the Capital One® Quicksilver® Cash Rewards Credit Card has a longer intro-APR period.
The Alliant Cashback Visa® Signature Credit Card is a small-town card with big-city rewards — unlimited 3% cash back rewards, to be exact. While you’ll only earn unlimited 2.5% cash back after the first year, that rate still tops much of the competition.
- Earn unlimited 3% cash back the first year, then unlimited 2.5% cash back after
- Pay no foreign transaction fees
- Pay $0 annual fee the first year, then $59
Once approved, you can become eligible to be a member if you work for a Qualifying Company, live or work in a Qualifying Chicagoland Community, are a member of a Qualifying Organization, or donate to become a member of Foster Care to Success.
Save Even More on Your Bulk Purchases with the Right Card
While few of us really need a vat of mayonnaise or cubic foot of peanut butter, just about anyone with multiple mouths to feed can likely find a good deal at a warehouse club.
But when you’re already paying a membership fee just for the right to browse the cavernous aisles, the savings margin can be slim for those not supplying a small army.
Choosing the right credit card for your Costco purchases can not only ensure you actually have a way to pay (remember, Visa only!), it can also add a little more steal to your deal by potentially making up for that troublesome membership fee.