Best Credit Cards To Use At Costco

by | May 18, 2020

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If you’re a frugal shopper, Costco trips are probably a part of your routine. They offer some of the best value of all big box stores in everything from dry groceries to specialty items to home goods.

You may have noticed that Costco has a few more barriers to entry than most big box or grocery stores. Not only do you need an active membership to shop at the store, but credit card users need to pay with a Visa card. 

So the question is, which are the best credit cards with the best perks for Costco shoppers?

Costco Anywhere Visa® Card by Citi

Best for: Frequent Costco shoppers will benefit most from this card, especially if they gas up every time they shop. 

Why it’s good for a Costco shopper: This card has the best year-round cash-back rate for Costco at 2% cash-back and 4% on gas. Costco already has low gas prices, so you’ll save even more by filling up there.

APR: This card has an APR of 17.49% for purchases and balance transfers. If you have a late or returned payment, the penalty APR may be up to 29.99%.

Rewards: Cardholders earn 4% cash back rewards on eligible gas purchases at gas stations, up to $7,000 in purchases annually and then 1% after, 3% on restaurants and travel purchases, 2% on all Costco and Costco.com purchases and 1% on all other purchases.

Other perks: There are no foreign transaction fees.

Annual fee: There is no annual fee when you pay your Costco membership with this card.

Other fees: The cash advance fee is either $10 or 5%, whichever is greater. The balance transfer is either $5 or 3%, whichever is greater.

What to know: Rewards are calculated once a year in February and sent out as a check. This may be frustrating to customers who are used to redeeming rewards once a month.

Bank of America® Cash Rewards Credit Card

Best for: This card is a holistic option for Costco customers who want a decent overall cash-back credit card.

Why it’s good for a Costco card holder: Customers will earn 2% cash back for Costco purchases and a healthy cash-back rate at other stores. 

APR: The card offers 0% APR for both purchases and balance transfers for the first 12 billing cycles. After that, the APR is a variable of 16.24% to 26.24%, depending on your creditworthiness.

Rewards: Cardholders may pick from one of the following categories to earn 3% cash-back:

  • Gas
  • Online shopping
  • Dining
  • Travel
  • Drug stores
  • Home improvement/furnishings 

This is limited to the first $2,500 in purchases each quarter, after which the cash-back rate switches to 1% until the next quarter.

Users will earn 2% cash back at grocery stores and wholesale clubs, including Costco, and 1% cash back on all other purchases. Cash-back may be redeemed as statement credit or deposited into your Bank of America bank account, 529 account or qualifying Merrill Lynch or Merrill Edge account.

Other perks: Users can take advantage of a 0% balance transfer offer and a $200 sign-up bonus.

Annual fee: $0

Other fees: There is a 3% or $10 balance transfer fee, whichever is greater. The penalty APR, applied to late payments, will be up to 29.99%. There is a 3% foreign transaction fee. The late payment fee may be up to $39 and the returned payment fee may be up to $28.

Bonus: New cardholders can earn $200 when they spend $1,000 in the first three months.

Discover it Cash Back

Best for: This card works best for those who only shop at Costco once in a while. Users get 5% cash-back at wholesale clubs one quarter out of the year.

Why it’s good for a Costco shopper: The bottom line is that the 5% option is only available during one quarter of the year, so Costco members who like to make one or two big shopping trips a year can end up saving a significant amount – as long as they shop during the specified quarter.

APR: This card has a 14.24 to 25.24% variable APR depending on your credit, and 27.24% APR for cash advances.

Rewards: Discover offers 5% cash back on categories that rotate every quarter, including gas, restaurants, online shopping and wholesale clubs. You have to activate those rewards to be eligible.

Users earn 1% cash back on all other purchases, and cash-back can redeemed any time. Discover will also match any cash back earned in the first year. 

Other perks: Discover provides a free credit score monitoring service, notifying cardholders when activity shows up on their credit report. There are also no foreign transaction fees.

Annual fee: $0

Other fees: There’s a 3% balance transfer fee and $5 or 10% cash advance fee, whichever is greater.

Bottom Line

If you’re someone who grocery shops at Costco, then it’s time you benefit from each time you swipe. Are you interested in learning more ways to lower your bills? Check out our Personal Finance blog for more ways to save!

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