If you own your own business, you’ve probably weighed the pros and cons of a warehouse club membership with Costco. Now, there’s another argument in Costco’s favor: the Costco Anywhere Visa® Business Card by Citi. The Costco Anywhere Visa Business Card is a business credit card with generous cash back rewards that favor Costco members, frequent travelers, and foodies.
Costco Anywhere Visa Business is intended solely for Costco members. To qualify and remain in good standing, you need to have a paid-up Costco membership. The standard business Costco membership costs $60 per year, plus any applicable local tax. Executive business membership, which entitles members a 2% reward (up to $750 per year) on certain Costco purchases, costs $120 per year, plus applicable taxes. Your credit card always doubles as your Costco ID, regardless of your chosen membership plan, so you can leave your Costco membership card at home when you shop.
Costco Anywhere Visa Business has a very attractive cash back program. It earns 4% cash back on the first $7,000 spent on eligible gas purchases (including at Costco gas stations), unlimited 3% back on travel and restaurant purchases, and unlimited 2% back on Costco and Costco.com purchases. On the other hand, it doesn’t have a sign-up bonus or introductory 0% APR promotion.
Earning Cash Back Rewards
Costco Anywhere Visa Business’s cash back rewards program is split into 4 tiers:
- 4% Tier: The first tier $7,000 in annual purchase at qualifying gas stations, including Costco gas stations and retailers coded as gas stations, earns 4% cash back. Above the annual cap, qualifying gas purchases earn an unlimited 1%. Gas purchased at superstores, convenience stores, grocery stores, and warehouse clubs other than Costco does not earn 4% and does not count toward the spending cap. Instead, it earns an unlimited 1% cash back.
- 3% Tier: Next, dining-out and travel purchases – including airfare, hotels, rental cars, and vacation packages such as those offered by Costco Travel – earn an unlimited 3% cash back.
- 2% Tier: All non-gas purchases at Costco and Costco.com earn an unlimited 2% cash back.
- 1% Tier: All other purchases that fall outside these categories earn an unlimited 1% cash back.
Redeeming Cash Back Rewards
Every year, you receive a coupon for the full amount of the cash back earned during the previous calendar year with your February account statement. This coupon can be redeemed for store credit, hard cash (or paper check), or a combination of the 2 at any Costco warehouse location. If you choose to redeem for store credit and the coupon’s value is greater than your redemption transaction’s value, Costco gives you the rest in cash or paper check form.
You must earn at least $1 in rewards each year to receive a coupon. If you don’t hit the $1 threshold by December 31st, you forfeit whatever rewards you do earn that year.
There is no annual fee for the card itself. However, cardholders are required to maintain current, paid-up Costco business memberships at a minimum annual cost of $60 plus applicable local tax. Foreign transactions cost 3%, but they’re free at international Costco locations. Cash advances cost the greater of $10 or 5%. Balance transfers are not allowed. Late and returned payments cost $37.
This card comes with some useful cardholder benefits. These include:
- Extended warranties on certain items with existing manufacturer warranties
- Purchase protection (up to $500 per covered item) against loss or damage for 120 days from purchase
- Complimentary rental car insurance when you pay for the rental in full with your card
- Complimentary travel accident insurance worldwide, a cursory form of travel insurance
- Citi Price Rewind, which entitles you to reimbursement of the difference if you find a lower advertised price online or in print for an item purchased within 60 days
This card requires excellent credit. Any notable credit issues are likely to disqualify you from consideration.
- Awesome Dining and Travel Rewards. Costco Anywhere Visa Business has one of the best deals on dining and travel spending of any business credit card. Its unlimited 3% cash back on all travel and restaurant purchases is broader and more generous than most of its competitors. For example, the Starwood Preferred Guest Business Credit Card from American Express, widely regarded as one of the best business travel rewards cards on the market, is really only useful at approximately 1,200 Starwood hotel properties worldwide. Meanwhile, business cards that reward general travel spending, such as Capital One Spark Miles for Business, return just 2% on travel purchases. And Costco Anywhere Visa Business is a step up from Costco’s previous restaurant and travel deal, as the company’s now-defunct American Express credit card paid just 2% back on restaurant and travel purchases, excluding non-U.S. restaurants.
- Regular Costco Members Can Earn 2% Back on Costco Purchases With No Spending Cap. Costco Anywhere Visa Business earns unlimited 2% cash back on Costco and Costco.com purchases. That’s the same benefit afforded to Costco’s Executive members, even without this card, though cardless Executives are subject to a $750 annual rewards cap. The good news for Costco Anywhere Visa Business cardholders is that they don’t have to pay $120 per year (plus) tax for Executive membership to earn 2% back at Costco, and they’re not subject to the $750 annual rewards cap. If you want to stretch your Costco dollars 2% further, this card is your best – and cheapest – opportunity.
- Nice Gas Rewards for Moderate Drivers. Costco Anywhere Visa Business’s gas benefit is pretty great too. Though this card does have a $7,000 annual spending cap on gas, few other business cards pay 4% back on gas spending in any capacity. If you can hit the cap in a 12-month period, you’ll earn a cool $280 on gas spending alone. That said, if your business has a fleet of vehicles or you spend a great deal of time driving between appointments, a card with a lower, uncapped gas benefit could be a better deal.
- No Annual Fee for the Card Itself. Though you do have to spring for a $60-per-year (plus tax) Costco membership to qualify for it, this card doesn’t impose an annual fee on top of the Costco fee. That keeps its annual cost lower than some top business credit cards, such as Chase Ink Plus, which charges $95 per year.
- No Foreign Transaction Fee at International Costco Locations. Most international transactions made with this card incur a 3% foreign transaction fee. Luckily for Costco members, purchases at overseas Costco locations are exempt from the fee. That’s great news for Costco members who live overseas (or travel abroad frequently) and have easy access to Costco clubs when not in the U.S.
- Requires Current Costco Membership. Costco Anywhere Visa Business requires a current Costco membership. As a basic Costco business membership costs at least $60 per year, plus any applicable local sales tax, that means this card has a de facto annual fee of $60 or more. While it’s certainly the case that Costco membership is a good investment for small business owners who consume bulk supplies in earnest, the recurring fee nevertheless eats into this card’s cash back earnings. If your business doesn’t churn through the sorts of supplies you can buy at Costco, and you don’t spend heavily on restaurants, travel, or gas, this card probably isn’t worthwhile. Look to an annual-fee-free business card that rewards general spending, such as Capital One Spark Cash Select.
- Must Redeem Rewards in Person. Unlike most business cash back cards, Costco Anywhere Visa Business requires you to redeem your rewards in person at a Costco warehouse location. To receive store credit or cash, you need to present the coupon that comes with your February statement. This isn’t a huge deal if you live close to your local Costco and shop there often, but it can be very inconvenient if you favor infrequent Costco runs. After all, the last thing you want is to drive an hour to the nearest Costco and discover in the checkout line that you left your coupon on the kitchen counter. Most other business cash back cards don’t have this issue, as they allow cash redemptions online or by mail.
- No Sign-up Bonus. This card does not have a sign-up bonus. That’s a big drawback relative to many competing business cash back and travel cards, whose sign-up bonuses can be worth $500 or more.
- Can Only Redeem Rewards Once Per Year. You can only redeem your accumulated cash back rewards once per year, and you need to do so in one transaction. Needless to say, most competing cash back cards are far more flexible – they allow redemptions as often as cardholders please, subject to minimum redemption thresholds in some cases.
- Gas Category Is Restrictive. This card’s gas category is potentially restrictive. You only earn 4% cash back (up to $7,000 in spending per year) on gas purchased at Costco and merchants classified as gas stations. Gas purchased at other warehouse clubs, supermarkets, superstores, and merchants classified as convenience stores earns just 1% cash back. If you’re not in a position to fill up at Costco or traditional gas stations regularly, this is a big disadvantage.
- Overly Sensitive Fraud Detection. Costco Anywhere Visa Business has an overly sensitive fraud detection mechanism that, according to numerous anecdotes from cardholders, flags normal transactions as suspicious. For instance, one Costco cardholder reported that her account was frozen after she spent more than $200 at a non-Costco big box store. Another was flagged after making 5 purchases on the same day in a 60-mile radius. Though fraud detection procedures are always subject to change, they appear to be problematic at present.
- No Balance Transfers. Unlike its consumer counterpart, Costco Anywhere Visa Business doesn’t allow balance transfers. That’s a problem for new cardholders who want the option to transfer existing high-interest balances to a lower-interest card.
Though the Costco Anywhere Visa® Business Card by Citi is clearly a great deal for business owners who travel and dine out frequently, it’s wise not to overlook its unlimited 2% cash back on Costco and Costco.com purchases. Without this card, only Executive members (who pay $120 per year, plus tax, for the privilege) get 2% back on Costco purchases – and their earnings are capped at $750 per year. Anywhere Visa Business cardholders get unlimited 2% back for just $60 per year, plus tax. If you’re already a frequent Costco shopper or can easily adjust your purchasing habits to take advantage of this deal, it alone could make your Costco Anywhere Visa Business Card worthwhile.