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The best credit cards for shopping at Costco
When you need a really good deal on everyday grocery items like bulk frozen food, a massive bag of baby spinach, and almond milk — or larger purchases like car tires, a 600-bottle wine cellar, or funeral caskets, Costco is the place to go. You can even fill up your gas tank on the way out at prices strikingly lower than nearby gas stations.
Costco is a mecca of savings, and just by shopping there, you’re taking a huge cut out of your expenses. With the right membership, you’ll even earn 2% back on all your purchases. But with the right credit cards, there are ways to save even more.
Costco only accepts Visa in-store. If you’re shopping online, however, you can also use Mastercard and Discover.
Here are the best credit cards for Costco shopping. You’d be surprised to know that Costco credit cards aren’t the best option.
Read more: Is a Costco membership worth it?
We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.
Best personal Costco credit card: Costco Anywhere Visa® Card by Citi
Costco has one personal credit card, and this is it. It’s been well-optimized for Costco customers — though as you’ll see, there are better options available.
The Costco Anywhere Visa® Card by Citi earns cash back at the following rates:
4% cash back on eligible gas worldwide on up to $7,000 in spending each year (then 1%)3% cash back on restaurants and eligible travel purchases worldwide2% cash back on all other purchases from Costco and Costco.com1% cash back on all other eligible purchases
As you can see, the card overperforms at gas stations. A 4% return is one of the best in the business, and you aren’t even relegated to Costco pumps.
Read more: Costco Anywhere Visa Card review
Aside from the card’s return rates, its only real benefits are purchase protection and that it doesn’t charge foreign transaction fees.
The Costco Anywhere Visa® Card by Citi comes with a Costco Anywhere Visa® Card by Citi annual fee, so it’s free to keep forever. The card does not come with a sign-up bonus at this time, though Costco customers have found themselves to occasionally be targeted for an intro offer by inquiring at a Costco warehouse.
To redeem your cash back with this card, you’ll have to wait until after your February billing statement closes. You’ll then get a “reward certificate” that you can claim for the cash back you earned over the previous year. You must also go to a Costco warehouse to redeem.
Best Costco credit card for travel and purchase insurance: Costco Anywhere Visa® Business Card by Citi
The Costco Anywhere Visa® Business Card by Citi has many identical benefits to the personal Costco Anywhere Visa® Card by Citi. It offers no sign-up bonus, its annual fee is Costco Anywhere Visa® Business Card by Citi, and it doesn’t incur foreign transaction fees. It even earns cash back at the same rates:
4% cash back on eligible gas worldwide on up to $7,000 in spending each year (then 1%)3% cash back on restaurants and eligible travel purchases worldwide2% cash back on all other purchases from Costco and Costco.com1% cash back on all other eligible purchases
Read more: Costco Anywhere Visa Business Card review
However, this card comes with useful travel and purchase benefits you won’t find on the personal Costco credit card:
Extended warranty protectionWorldwide travel accident insuranceWorldwide rental car insurance
Perks like extended warranty protection and damage/theft protection make this card a good option for expensive Costco purchases such as electronics or appliances.
Best all-around credit card for Costco shopping: Bank of America® Customized Cash Rewards Credit Card
Often the best credit cards for a specific store aren’t the ones branded with the store’s name. The Bank of America® Customized Cash Rewards Credit Card offers an equal or greater earning rate for Costco purchases than the above cobranded Costco cards in just about every category except gas stations. You’ll receive:
3% cash back in the category of your choice: Gas, online shopping, dining, travel, drug stores, or home improvement/furnishings*2% cash back at grocery stores and wholesale clubs*1% cash back on all other eligible purchases
*Bonus cash is only eligible for the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter. After that, you’ll earn 1%.
In short, you’ll get 2% on purchases when you shop in-store, and 3% when you shop at Costco.com if you choose online shopping as your 3% cash back category. Pretty great for a Bank of America® Customized Cash Rewards Credit Card annual fee card.
The Bank of America® Customized Cash Rewards Credit Card also comes with a sign-up bonus: Bank of America® Customized Cash Rewards Credit Card. Mathematically, this bonus is infinity percent higher than the public offers of either Costco credit card.
Plus, if you’re a Preferred Rewards member, you can earn up to 75% more cash back. Here’s how you qualify:
25% bonus — You must have between $20,000 and $49,999 in combined balances in your BOA deposit and/or Merrill investment accounts50% bonus — You must have between $50,000 and $99,999 in combined balances in your BOA deposit and/or Merrill investment accounts75% bonus — You must have $100,000+ in combined balances in your BOA deposit and/or Merrill investment accounts
Imagine earning 5.25% when shopping online or 3.5% for shopping in-warehouse.
The cash back you earn with this card is also remarkably easier to redeem than the rewards you accrue with a Costco credit card (which only allows you to redeem once per year). You can redeem any time for a statement credit, direct deposit into a Bank of America account, a check, etc. You’ll just need to have earned at least $25 before you can request to cash out.
Best Chase Ultimate Rewards card for shopping at Costco: Chase Freedom Unlimited®
The Chase Freedom Unlimited® comes with Chase Freedom Unlimited®.
Read more: Chase Freedom Unlimited review
Here are the card’s ongoing earning rates:
5% cash back (5x points) on travel purchased through Chase Ultimate Rewards3% cash back (3x points) on dining and drugstore purchases1.5% cash back (1.5x points) on all other eligible purchases
Unfortunately, Costco doesn’t count as a grocery store with this card. But the ability to earn 1.5% cash back is better than it seems. That’s because the Chase Freedom Unlimited® technically earns 1.5 Chase Ultimate Rewards points per dollar — not 1.5% cash back. You’re welcome to redeem those points at a rate of 1 cent each. But these points are worth significantly more if you also have one of the following cards:
Chase Sapphire Preferred® CardChase Sapphire Reserve®Ink Business Preferred® Credit Card
By transferring the rewards you earn on the Chase Freedom Unlimited® to one of the cards above, you can then convert your points into valuable airline miles or hotel points. Insider estimates that the average Chase points value is 1.8 cents each when redeeming this way. In other words, earning 1.5 points per dollar is equivalent to earning 2.7% back.
Other card benefits include:
Purchase protectionExtended warrantyChase Freedom Unlimited® (then Chase Freedom Unlimited®)
The intro APR is generous and extremely valuable if you intend to make a large purchase for which you’ll need to temporarily carry a balance.
Best travel credit card for shopping at Costco: Capital One Venture X Rewards Credit Card
The Capital One Venture X Rewards Credit Card is a premium travel credit card that earns 2 Capital One miles per dollar on all purchases. Those points are worth at least 1 cent each toward travel — but you can get more out of them if you try.
Read more: Capital One Venture X review
Insider estimates Capital One miles are worth an average of 1.7 cents each when you transfer them to airline and hotel partners like Air Canada, Turkish Airlines, Wyndham, and more. If you agree with our valuations, earning 2 miles per dollar is equivalent to a 3.4% return.
The card charges a Capital One Venture X Rewards Credit Card annual fee. But it comes with benefits that blow all other cards on this list out of the water:
Up to $300 per year in statement credits toward Capital One Travel bookingsPriority Pass and Capital One airport lounge access (worth at least $429 per year)10,000-mile bonus each account anniversary (worth at least $100 in travel)Global Entry or TSA PreCheck application fee creditHigh-grade travel insurancesReturn protectionExtended warrantyCell phone protection
Again, it’s great to use a card with return protection and extended warranty protection when making sizable purchases from Costco.
This card also comes with Capital One Venture X Rewards Credit Card.
Bottom line
Costco credit cards are great if you spend a lot at Costco — but they’re not the best. If you want pure cash back, the Bank of America® Customized Cash Rewards Credit Card gives you a healthy return on Costco purchases, and absolutely eclipses all other cards if you qualify for the Bank of America Preferred Rewards program (up to 5.25% for online purchases!).
Remember, the rewards you earn with any of the above credit cards are in addition to the potential 2% back you’ll earn if you’ve got a Gold Star Executive membership. Stack this with a credit card like the Bank of America® Customized Cash Rewards Credit Card, and you could potentially earn 7.25% with select Costco shopping.