- Rewards rate: 4 percent cash back on eligible gas and EV charging purchases including gas at Costco (for the first $7,000 per year, then 1 percent), 3 percent cash back on restaurant and eligible travel purchases, 2 percent cash back on all Costco and Costco.com purchases and 1 percent cash back on all other purchases
- Welcome offer: N/A
- Annual fee: No annual fee with your paid Costco membership ($60)
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 20.49 percent (variable)
Current sign-up bonus
The Costco cash back card is one of the few retail credit cards that doesn’t offer a sign-up bonus. Typically, you’ll at least see bonus store credit or introductory rates.
Other no annual fee cards for wholesale club and gas rewards deliver sign-up bonuses worth at least $150 or $200. Even the Capital One Walmart Rewards® Mastercard®* provides a 5 percent introductory cash back rate on in-store purchases for your first 12 months as a card member, and the Prime Visa offers a great welcome offer: Get a $200 Amazon Gift Card instantly upon approval exclusively for Prime members.
Although the first thing that comes to mind might be groceries, Costco’s card actually earns more cash back on other expenses like gas, restaurants and travel. It’s a great all-around travel partner as well. Since it’s a co-branded Visa card, your Costco Visa cash back opportunities are worldwide — not just storewide. However, there are a few inconvenient details surrounding the cash back redemption process that may limit the card’s utility for applicants that aren’t loyal Costco shoppers.
How you earn
In addition to the 2 percent cash back you’ll earn on Costco/Costco.com purchases, you’ll also earn a whopping 4 percent on eligible gas and EV charging purchases (on up to $7,000 in purchases per year, then 1 percent), 3 percent on eligible restaurant and travel purchases and 1 percent on all other purchases. It’s worth noting how flexible the Costco category is, considering it could encompass the automotive service, pharmacy needs, optical department purchases and more you’ll find in-store.
However, you’ll find a few critical caveats in the terms and conditions. For instance, though the category extends beyond just Costco gas purchases, you can’t earn 4 percent cash back at other store-brand gas stations — like Walmart or Harris Teeter — or for non-vehicle gas purchases. You also won’t earn your 3 percent dining and travel cash back at bakeries, some department store restaurants/cafes or bed-and-breakfasts. Oddly, these travel reward exclusions rule out commuter and train travel too.
Luckily, you probably won’t have to worry about the gas category’s $7,000 limit, though. The U.S. Bureau of Labor Statistics’ (BLS) most recent spending data shows the average household spends around $1,500 to $2,100 on gas each year, which would net $60 to $84 in cash back from your gas pit stops alone. Roadrunners that rack up a full $7,000 in gas expenses per year could pocket a cool $280 in cash back.
Regardless, typical drivers should feel comfortable leaning on this card’s other categories for an average yearly rewards value of about $337 — calculated with the BLS’ most recent data and an estimated $15,900 yearly spend. That cash back haul out-earns a number of other no annual fee gas and shopping cards like the Blue Cash Everyday® Card from American Express.
How to redeem
You’re only allowed to redeem your cash back once per year, after your February billing statement. Then, you receive your rewards as a single “credit card reward certificate,” which must be redeemed for purchases, cash, or a combination of the two before December 31 of that year. You lose your rewards otherwise, so it can be difficult to cancel your card without leaving all of your rewards that year on the table if you aren’t getting enough value already.
While maybe not a deal-breaker for those who shop at Costco regularly, this is a huge drawback. Most cash back cards let you redeem your rewards at any time (or after hitting a minimum earning) and for much more flexible options — such as a statement credit or direct deposit.