If you’re a Costco loyalist who is looking for a credit card with generous cash back — and you don’t mind redeeming those rewards only once a year at the wholesale club — the Costco Anywhere Visa® Card by Citi might be a great fit for you. But if you’d prefer a card that offers travel rewards or elevated cash back rates for grocery purchases outside of Costco, you might want to consider other options.
Here’s what the Costco credit card offers and three reasons to consider it.
3 Reasons to Get the Costco Anywhere Visa® Card by Citi
With the Costco credit card, you can receive impressive rewards in popular categories like gas and dining, on par with some of the top cash back credit cards on the market. But it’s especially rewarding if you shop regularly at Costco.
“If you really love to shop at Costco, this is a card worth considering,” says credit card and travel expert Stephanie Zito. “If you’re just in it for the cash back, there are comparable or better options with more flexible rewards.”
[Read: Best Credit Cards for Excellent Credit.]
Here are the key reasons to consider the Costco Anywhere Visa® Card by Citi.
Top Cash Back
You’ll earn top cash back rates on worldwide purchases. Not only does the Costco Anywhere Visa® offer impressive rewards on dining, travel, gas and EV charging stations — but any international purchases you make in these categories earn the same amount of cash back as domestic purchases.
The rewards structure breaks down like this:
— 5% cash back on Costco gas, and 4% cash back on other gas and EV charging purchases worldwide for the first $7,000 per year, then 1% thereafter
— Unlimited 3% cash back on dining and eligible travel, including Costco Travel worldwide
— Unlimited 2% cash back on Costco and Costco.com purchases
— 1% cash back on all other purchases, including purchases at traditional grocery stores
No Foreign Transaction Fees
A Visa card with no foreign transaction fees means the Costco card is accepted nearly everywhere — both domestically and abroad — and will cost nothing extra to use overseas. Many credit cards come with a 3% foreign transaction fee.
Travel Insurance
Cardholders who pay for travel using the Costco credit card will have access to worldwide travel accident insurance, rental car insurance, and travel and emergency assistance.
“All of these perks make it a great card for everyday use, as well as traveling abroad,” says Ariana Arghandewal, credit card expert and founder of Pointchaser.
Drawbacks of the Costco Anywhere Visa® Card by Citi
— Membership is required. To apply for the card and be eligible to redeem the cash back you earn on the card, you’ll need to have a Costco membership, which is at least $65 per year.
— Cash back rewards come in the form of an annual certificate. Cardholders will receive the cash back they’ve earned only once a year — usually around late February — in the form of a certificate. This differs from a traditional cash back card, which allows you to redeem cash back as you earn it.
— You can only redeem your cash back certificate at a Costco warehouse. Reward certificates expire on Dec. 31 of the year they were issued and can only be redeemed in a single transaction at a Costco warehouse — not online.
— No welcome bonus or 0% intro APR. Unlike many other no-annual-fee cash back credit cards that offer welcome bonuses as high as $250, the Costco card doesn’t. And don’t expect any interest-free spending offers — the card comes with a 18.74% to 26.74% variable annual percentage rate based on your creditworthiness.
[Read: Rewards Credit Cards]
Smartest Ways to Use the Costco Credit Card
The Costco card can be a solid cash back card and even a good companion on your travels. Here’s how to maximize its benefits.
— Use a Costco Executive membership for maximum cash back. It costs $130 a year — twice as much as the Gold Star membership — “but you’ll double dip on your earnings when you spend at Costco,” says Zito. The executive membership offers 2% cash back on all Costco purchases, so combined with the card’s rewards rate, you’ll earn 4% cash back every time you shop at Costco.
— Use the card for everything, especially on fuel. At 4% cash back, few other cards offer such generous rewards on gas and EV charging purchases. “You don’t necessarily have to be a frequent Costco shopper to benefit from the card, since it offers elevated rewards outside of the retailer,” says Arghandewal.
— Bring the card with you when you travel. In addition to charging no foreign transaction fees, the Costco card offers worldwide rental car insurance, roadside assistance dispatch service, travel and emergency assistance, and worldwide travel accident insurance.
[Read: Best Credit Cards.]
Who Should Consider the Costco Anywhere Visa?
“If you want a simple cash back card, the Costco Anywhere card would be a solid option,” says Arghandewal. “Additionally, the card might not be a good fit for those whose spending falls outside of the 2% to 4% bonus categories.”
For example, if you regularly shop for groceries at traditional supermarkets, you’ll only earn 1% cash back on those purchases with the Costco card.
If you enjoy the flexibility of redeeming cash back for small amounts as soon as they post to your account, a traditional cash back card may be a better fit. On the other hand, depending on how much cash back you earn, the annual certificate offered by the Costco card may help you offset a large item you may be considering — or even just the cost of your annual Costco membership.
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3 Reasons to Get the Costco Credit Card originally appeared on usnews.com