Do you have a warehouse club membership with Costco? If so, you probably already know about the Costco Anywhere Visa® Card by Citi. If not, this generous cash back credit card is a good reason to take a closer look.
Costco Anywhere Visa is specifically designed for Costco members. It’s not available to the general public, and you have to maintain a paid-up Costco membership to remain in good standing. The standard household (Gold Star) or business Costco membership costs $60 per year, plus any applicable local tax. Executive membership, which entitles members to special rewards and discounts on certain Costco purchases, costs $120 per year, plus applicable tax. Regardless of your chosen membership plan, your Anywhere Visa doubles as your Costco ID, so you don’t need to remember a separate piece of plastic when you hit the warehouse.
On paper, Costco Anywhere Visa has an extremely generous cash back program. For example, it earns 4% cash back on the first $7,000 spent on eligible gas purchases (including at Costco gas stations, but excluding many other types of gas stations), and unlimited 3% back on travel and restaurant purchases. However, it lacks a sign-up bonus and 0% APR introductory promotion, both of which are common features of competing cash back cards.
Earning Cash Back Rewards
Costco Anywhere Visa has a tiered cash back rewards program with 4 distinct levels:
- 4% Tier: Gas purchases at qualifying gas stations, including Costco pumps and merchants coded as gas stations, earn 4% cash back up to the first $7,000 spent per year. Above the $7,000 annual cap, qualifying gas purchases earn an unlimited 1%. Purchases at non-qualifying gas stations, including stations at superstores, grocery stores, convenience stores, and warehouse clubs other than Costco, earn 1% cash back.
- 3% Tier: Restaurant and travel purchases – including airfare, hotels, rental cars, and vacation packages (including those offered by Costco Travel) – earn an unlimited 3% cash back. This tier makes Costco Anywhere Visa a great way to save money at restaurants and on international travel.
- 2% Tier: Non-gas purchases at Costco and Costco.com earn an unlimited 2% cash back.
- 1% Tier: All other purchases earn an unlimited 1% cash back.
Redeeming Cash Back Rewards
With every February billing statement, you receive a coupon for the full amount of the cash back you earned during the previous calendar year. You can redeem this coupon at any Costco warehouse location, either as credit against in-store purchases, or for hard cash or a paper check. If your coupon’s value is greater than your redemption transaction’s value, you receive the remainder in cash or by check, your preference.
The minimum coupon value is $1. If you fail to earn at least $1 in rewards in a given year, you’ll receive nothing the following February.
There is no annual fee for the card itself, but the issuer does require a paid-up Costco membership at a minimum annual cost of $55 plus applicable local tax. Foreign transactions normally cost 3%, but the fee is waived at international Costco locations. Balance transfers cost the greater of $5 or 3%, while cash advances cost the greater of $10 or 5%. Late and returned payments cost $37.
This card comes with some additional cardholder benefits. The most notable include:
- Purchase protection against loss or damage for 120 days from purchase, up to $500 per item
- Extended warranties on certain items with existing warranties
- Complimentary rental car insurance on rentals paid in full with your card
- Travel accident insurance worldwide (a bare-bones form of travel insurance that’s not a substitute for a comprehensive policy)
- Trip interruption and cancellation insurance (a more robust travel protection)
- 24/7 emergency assistance for travelers
- Price protection (Citi Price Rewind) for 60 days, during which Citi reimburses the difference if you find a lower advertised price online or in print for a recently purchased item
This card requires excellent credit. Any significant credit issues are likely to disqualify your application.
- Excellent Dining and Travel Rewards. This card’s unlimited 3% travel and restaurant benefit is nearly unrivaled among comparable rewards cards. For comparison, Chase Sapphire Preferred, one of the best travel rewards cards on the market, returns a maximum of 2.5% on travel spending (and only 2% when rewards are redeemed for non-travel purchases) – and it has a $95 annual fee. It’s also worth noting that Costco’s now-defunct American Express credit card offered only 2% back on restaurant and travel purchases, and excluded non-U.S. restaurants from the deal.
- Very Good Cash Back Rewards on Gas. Costco Anywhere Visa offers very good gas rewards. Though gas purchases at non-Costco grocery stores, superstores, and warehouse clubs don’t qualify, the 4% gas benefit and $7,000 annual spending cap is still better than most competing cards. Plus, if you’re a Costco member, there’s a good chance you’ll buy much of your gas at Costco locations anyway. If you spend up to the cap, you’ll earn $280 per year from the gas benefit alone.
- 2% Back on Costco Purchases Without Executive Membership. Costco Anywhere Visa earns unlimited 2% cash back on Costco purchases. Costco’s Executive members also get 2% back on most Costco purchases, even if they don’t have this card, but they have to spring for a $120 (plus tax) annual membership. Anywhere Visa’s 2% deal is available to regular members too.
- No Annual Fee for the Card Itself. Though it does require cardholders to be Costco members – a $60-per-year (plus tax) expense – this card doesn’t carry its own annual fee. By contrast, the similarly generous Blue Cash Preferred from American Express charges $95 per year.
- Foreign Transaction Fee Waived at International Costco Locations. You need to budget for a 3% foreign transaction fee on most international purchases made with this card. However, there’s one very useful exception for Costco members: purchases at non-U.S. Costco locations. If you live or spend lots of time overseas and have easy access to Costco warehouse clubs there, this benefit can go a long way.
- Requires Costco Membership. This card requires a paid-up Costco membership, which costs at least $60 per year, plus any applicable local sales tax. Though Costco membership makes financial sense anyway for many larger households that consume groceries in bulk, the annual expense definitely eats into this card’s potential earnings. If you’re single or belong to a two-person household and don’t spend heavily on gas, restaurants, and travel, a no-annual-fee cash back card is likely a better deal.
- Must Visit Costco to Redeem Rewards. Costco Anywhere Visa doesn’t make it easy to redeem your rewards. You need to visit Costco in person and present the coupon you’ve received with your February statement. If you live far from the nearest warehouse location or shop at Costco only once in a great while, this is a major inconvenience – imagine how upset you’d be after driving 50 miles one way to your “local” Costco, only to discover you’d left your coupon at home. Most other rewards cards allow you to redeem cash back online, often via electronic bank account deposit.
- Can Only Redeem Rewards Once Per Year. Adding to the inconvenience of this card’s redemption requirements is the fact that you can only redeem your rewards once per year. In practice, this is likely to be on your first trip to Costco after you receive your cash back rewards coupon with your February statement. Most other cash back cards avoid artificial redemption timelines – you can redeem whenever you want, subject to minimum redemption thresholds, if any.
- Gas Benefit Is Restrictive. This card’s gas category isn’t as good as it seems. The 4% cash back benefit (up to $7,000 in spending per year) applies only to gas purchased at Costco and merchants coded as gas stations. It doesn’t cover gas purchased at convenience stores, supermarkets, superstores, and other warehouse clubs. Gas purchases at these places earn just 1% cash back. If you can’t fill up at Costco or traditional gas stations every time (or most of the time), this is a critical disadvantage.
- Overly Sensitive Fraud Detection. A preponderance of anecdotal evidence collected from Costco Anywhere Visa Card by Citi customers suggests that this card’s fraud detection mechanism is too sensitive – that is, it flags normal, everyday transactions and spending patterns as suspect. For instance, users have received fraud alerts and had their accounts frozen for spending more than $200 in a single Walmart transaction, and for making five purchases in one day within a 60-mile radius, among other innocuous behaviors. Though Citi could certainly improve its fraud detection practices in the future, they appear to lag at present.
- Has a Penalty APR. This card carries a penalty APR of 29.99%. Once imposed, it remains in force indefinitely. Over time, that can really add up for cardholders who carry balances and sometimes face liquidity issues that impact their payment schedules. Many competing cards, including the Discover it family of cash back cards, don’t charge penalty interest.
Costco Anywhere Visa® Card by Citi is one of the more generous rewards credit cards on the market. It combines the best elements of travel credit cards, gas credit cards, and store discount cards, yet still allows cardholders to redeem their accumulated rewards for cold cash. Because of its generosity, its lack of a direct annual fee, and the fact that it can be used anywhere Visa cards are accepted, there’s little downside to applying for this card if you’re a current Costco member who plans to maintain membership indefinitely. Likewise, if you’re on the fence about joining Costco, this card could be enough to convince you that it’s worthwhile.
On the other hand, this card isn’t a slam dunk for households that thrive outside the Costco bubble. If you’re perfectly happy without a Costco membership and aren’t sure that membership makes financial or practical sense for your family, you shouldn’t get one for the sole purpose of applying for this card.