Costco is a favorite shopping option for frugal people throughout the United States. The wholesale warehouse offers low prices on bulk goods as well as many popular services. Likewise, American Express has developed a reputation for value by offering charge cards and credit cards that provide you with rewards.
The TrueEarnings® Card from Costco and American Express gives customers cash back on all of their purchases.
- 1% Cash Back on Purchases. You don’t need to shop solely at Costco to get this cash back benefit. Wherever you use the card to pay for purchases, you’ll receive 1% cash back. The rate rises to 2% on travel and dining, and 3% for buying gas. For gasoline purchases, the 3% cash back applies to a maximum of $4,000 per year. Anything beyond that will return only 1% cash back.
- No Maximum Cash Back Limit. Other than the cap on gasoline purchases, there are no other limits to the amount of cash back you can receive.
- No Annual Fee. So long as you are a paid Costco member, there is never an annual fee.
- Foreign Transaction Fee. All purchases processed outside the United States are subject to American Express’s 2.7% foreign transaction fee.
- Competitive Cash Back Rates. 3% cash back on gas is equal to the rate earned by many gas cards. In addition, most offers for rebates on gasoline purchases exclude those from warehouse stores like Costco, which often have the best prices.
- Introductory Financing Offer. It is never a good idea to carry a balance on your credit card. Nevertheless, this card does offer six months of interest free financing on purchases. If you can utilize this without charging more than you can pay back before interest accrues, it may be a worthwhile feature.
- Reasonable APR. Reward cards are not known for their low APR, and this card is not one of the lowest APR credit cards out there. Nevertheless, most reward cards do have a higher rate.
- No Maximum Cash Back Limit. As mentioned above, there’s no cap on the amount of cash back you can earn.
- Year-end Summaries. A detailed report of your annual expenses is provided online for you to view, print, or download.
- No Annual Fee. Assuming that you have a paid Costco membership, you’re not charged an annual fee.
- Extended Warranty. The warranty on items bought using this credit card can be extended for an additional year.
- Purchase Protection. You’re protected if items bought using this credit card are stolen or damaged in the first 90 days after purchase.
- No Extra Cash Back at Costco. This co-branded rewards card is unique in that it offers no greater rewards for purchases at its retail affiliate, Costco, than it does for transactions anywhere else. With nearly every other reward card I have seen (and I have reviewed hundreds), customers are typically offered at least double rewards for shopping at the store that offers the card.
- Costco Membership Required. You need to have a Costco membership to successfully apply for this credit card. However, this can be looked at as a positive since it may help you save money with wholesale prices.
- Awards Are Only Returned Once a Year, and Only If You Keep the Card. The cash back offered is competitive, but only if you actually receive it. To do so, you must be a cardholder in good standing in the spring in order to receive a coupon with your billing statement. You must then go to Costco and redeem it for cash or a Costco gift card. Most other cash back credit cards simply apply your rewards as a statement credit each month. Furthermore, there have been reports that some people did not receive their cash back after they or American Express cancelled their card.
- High Foreign Transaction Fees. You’re charged 2.7% of the U.S. dollar equivalent of purchases that are made in foreign currency. As many other cards drop this unnecessary fee, including some offered by American Express, products with these charges become even less defensible.
Costco customers know that American Express is the only credit card that Costco accepts. For that reason alone, this card has found its way into the wallets of shoppers who had not previously carried an American Express. In addition, being able to earn 3% cash back on gasoline at Costco is a big plus since they normally have the best prices in town. The 2% cash back rates for travel and dining are also good to have.
Once you get past the odd quirk of not earning additional rewards at Costco itself, this card is still a competitive product in a crowded market for cash back credit cards.
Do you carry a TrueEarnings® Card from Costco and American Express? What are some of your favorite benefits that you frequently take advantage of?
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.