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Today, Costco officially switches over to Visa, meaning you can no longer use Amex cards — or any non-Visa cards — for purchases at the warehouse club. Thankfully, there are plenty of strong options to choose from, including the Chase Freedom Card with a quarterly 5x bonus category for wholesale stores that was recently extended through the end of 2016. Plus, starting today members can pay for Costco purchases with the Costco Anywhere Visa Card or the Costco Anywhere Visa Business Card, which both earn up to 4% cash back on a variety of bonus categories.
Citi first shared details about these cards back in March, but today’s the first day you can use them at Costco if you’re a current cardholder (you should have received your replacement for the previous Costco Amex by now). For those who didn’t hold the previous co-branded Amex, today’s also the first day you can sign up for the cards at Costco or via Citi’s website.
As a reminder, here are some of the card’s top benefits:
- 4% cash back rewards on eligible gas worldwide for the first $7,000 and then 1% thereafter
- 3% cash back rewards on restaurant and eligible travel purchases worldwide
- 2% cash back rewards on all other purchases from Costco and Costco.com
- 1% cash back rewards on all other purchases
The Costco Anywhere Visa Card also comes with damage and theft protection, trip cancellation and interruption protection, extended warranty, worldwide car rental insurance and worldwide travel accident insurance. There’s no annual fee, though there is a 3% charge on foreign transactions.
The business option for Costco members, offers the same benefits as the personal card — including the same bonus categories, the same additional coverage and insurance, as well as no annual fee.
Is It Worth It?
These cards are a big step up from the TrueEarnings Amex card, which only offered up to 3% cash back on gas (with a lower annual limit of $4,000). If you’re able to maximize the 4% gas bonus category, the Costco Anywhere Visa Card could definitely be a good choice, though it’s worth noting that there are several other strong options for gas purchases, including the Ink Plus Business Card (a 4.2% return on the first $50,000 spent on combined purchases at gas stations and hotels each year, based on TPG’s most recent valuations) and the Amex EveryDay Preferred Card (a 3.8% return on US gas station purchases, though if you make at least 30 purchases in a billing period you’ll also get a 50% points bonus). Also note that while the Costco Anywhere Visa Card and business version earn you 4% cash back on eligible gas purchases worldwide, you’ll be charged a 3% foreign transaction fee for charges made abroad, so you’ll want to look elsewhere in that situation.
The additional cash-back categories also represent an improvement over the previously available Costco Amex, though the bonus for Costco purchases is just 2%, meaning you’ll definitely want to use the Chase Freedom for non-gas purchases at the wholesale store instead (until you meet the $1,500 maximum for 5% cash back/5x rewards, that is). Overall, these cards could make sense if you prefer cash back to redeemable rewards. Just remember that you need to be a Costco member to be a cardholder, let alone shop at the store; annual memberships start at $55. Note that Executive Members ($110 per year) receive an additional 2% reward (up to $750) on qualifying purchases.
Finally, while both cards offer rewards in the form of cash back, you’ll want to note that you won’t get immediate gratification with rewards showing up in your statement as soon as a qualifying purchase is processed. Instead, with both the Costco Anywhere Visa Card and the Costco Anywhere Visa Business Card, you’ll get a coupon annually in your February billing statement reflecting how much cash back you’ve accumulated, and you’ll be able to redeem it through December 31 by visiting a Costco warehouse and exchanging the coupon for merchandise or cash. According to the terms and conditions, if you don’t redeem the entire coupon, you’ll receive the remaining balance in cash at the Costco warehouse register upon checkout.
Costco’s switchover to Visa is now official, and with that change comes the opportunity to maximize purchases at the store with several cards. If you held the now-defunct TrueEarnings Amex, the new Costco Anywhere Visa Card is an improvement, and it’s a particularly strong option for gas purchases in the US. This card could also make sense if you’re a frequent Costco shopper who prefers cash back to points or miles.
What are your thoughts on the new Costco Anywhere Visa Card?
- Exclusively for Costco Members: Go Big with Cash Back Rewards
- 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