The 5 best Visa cards for Costco purchases

Apr 10, 2020

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Editor’s note: This post has been updated with new information and current card offers.

Not only is Costco one of the largest retailers in the country, it’s also one of the more restrictive when it comes to payment options. Costco only accepts Visa credit cards, which means you can’t use a Mastercard or Amex to pay. Today we’re going to take a look at the most rewarding Visa credit cards for you to use on your next Costco trip.

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In This Post

Costco Anywhere Visa® Card by Citi

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Annual fee: $0 (with paid Costco membership)

Welcome bonus: N/A

The first pick is the most obvious one, the cobranded Costco Anywhere Visa issued by Citi. This card earns cash back at the following rates:

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% cash back thereafter
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases

The sweet spot for this card is clearly gas purchases at Costco and other vendors, although note the cap of $7,000 at the 4% level per year (then 1%). Unfortunately the card doesn’t offer any sort of welcome bonus, but because it doesn’t charge an annual fee (with paid Costco membership), you can rack up cash rewards with no out-of-pocket cost. The cash back earned on the card is redeemed once a year as a reward certificate that comes after your February billing statement closes. Once you have the reward certificate, you can redeem it for merchandise or cash at a Costco location.

Read our review of the Costco Anywhere Visa card.

Chase Freedom Unlimited

(Photo by Wyatt Smith/The Points Guy)
(Photo by Wyatt Smith/The Points Guy)

Annual fee: $0

Welcome bonus: Earn $150 after spending $500 on purchases in the first three months of account opening

Since most cards don’t offer bonus categories specific to warehouse clubs like Costco, your best bet is often to use a card that offers a strong return on everyday spending. Among all the Visa cards, none is better in this category than the Chase Freedom Unlimited. This no-annual-fee card offers 1.5% cash back on every purchase with no cap.

If you also hold a premium Ultimate Rewards-earning card such as the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® or the Chase Ink Business Preferred Credit Card, you can redeem cash back rewards as Ultimate Rewards points, effectively increasing your return on all purchases from 1.5% to 3%.

This could definitely be worth considering, especially if you’re interested in redeeming for awards rather than only receiving straight cash back. With this card (provided you also have another UR-earning card in your wallet), you have the option to transfer rewards to a variety of travel partners.

Read our review of the Chase Freedom Unlimited.

The information for the Ink Business Preferred card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Chase Freedom

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Annual fee: $0

Welcome bonus: Earn $200 after spending $500 on purchases in the first three months of account opening

Not to be confused with the Freedom Unlimited, the Chase Freedom is nearly identical except for its earning structure. It has the same sign-up bonus, redemption options and no annual fee. The big difference is how you earn points.

With the Chase Freedom, you’ll earn 5% back on your first $1,500 spent on rotating quarterly bonus categories (activation required), and 1% on all other purchases. Wholesale clubs like Costco normally appear on the bonus calendar at least once a year, giving you the opportunity to earn up to 5% back during this time frame.

Read our review of the Chase Freedom card.

The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

CHASE SAPPHIRE PREFERRED® CARD

(Photo by Wyatt Smith/The Points Guy)
(Photo by Wyatt Smith/The Points Guy)

Annual fee: $95

Welcome bonus:  Earn 60,000 Ultimate Rewards points after spending $4,000 in the first three months

Due to its wholesale prices, Costco is a go-to for many shoppers looking to buy big-ticket items such as TVs and jewelry. If you plan to make a large purchase at this retailer, you might want to consider using this card due to its purchase protection policy. With the Chase Sapphire Preferred, you’re covered for theft, damage or “involuntary and accidental parting” on eligible items for up to 120 days after you made the purchase (charging it to this card, of course). The policy will replace, repair or reimburse you for up to $500 per claim, with a maximum of $50,000 per account.

Even if you don’t need this coverage, the Chase Sapphire Preferred Card could be worth using on Costco purchases since it earns you valuable Ultimate Rewards points. You’ll only get 1 point per dollar at this retailer, since the card’s only bonus category is 2x on travel and dining, but you’ll still be getting a 2% return based on TPG’s valuation.

The Chase Sapphire Preferred Card has a $95 annual fee and no foreign transaction fees.

Read our review of the Chase Sapphire Preferred.

Alaska Airlines Visa Signature® credit card

(Photo by Eric Helgas for The Points Guy)
(Photo by Eric Helgas for The Points Guy)

Annual fee: $75

Welcome bonus: Earn 40,000 miles and a $100 statement credit after spending $2,000 in purchases in the first 90 days of account opening.

The last card on this list may be surprising to some, since it doesn’t offer any bonuses on spending at Costco. Still, the Alaska Airlines Visa Signature card earns you 1 mile per dollar on everyday purchases (and 3 miles per dollar on eligible Alaska Airlines purchases).

TPG values these miles at 1.8 cents apiece — higher than any other airline currency. This is partly because of how hard it normally is to earn Mileage Plan miles, but also because of the incredibly unique and valuable redemption opportunities they offer.

Further Reading: Maximizing redemptions with Alaska Airlines Mileage Plan

From free stopovers on one-way awards to dirt cheap prices for premium cabin flights on Cathay Pacific and JAL, Mileage Plan is an incredibly valuable program, and shopping at Costco can help you rack up miles quickly.

Read our review of the Alaska Airlines Visa Signature card.

The information for the Alaska Airlines Visa Signature card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom line

Picking the right card to use at Costco can be a challenge, between the general lack of bonus categories and the Visa-only policy. Whether you opt to earn cash back or travel rewards, there are a number of great credit cards that offer solid rewards when shopping at Costco.

Featured photo by Shutterstock

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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