Best Credit Card to Use at Costco
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If you are a loyal fan of Costco stores, this may have been a challenging year for you. Earlier this year, Costco ended its longtime partnership with American Express and began a new partnership with Citi and Visa.
If you had been using the old Costco American Express card, or any other American Express card, then you had to find a new card for your regular Costco shopping trips, and it had to be part of the Visa network.
Your first choice might be the Costco Anywhere Visa® Card by Citi, which is now the official card of Costco. This card offers you 4% cash back on all eligible gas purchases worldwide, including gas purchased at Costco. However, these rewards only apply to your first $7,000 spent on gas purchases each year, and offers just 1% cash back on additional gas purchases.
This card also features 3% cash back at restaurants and on eligible travel purchases worldwide, and 2% cash back from all Costco and Costco.com purchases. 1% cash back is earned on all other purchases.
Rewards come as a coupon that cardholders receive each year in February. And like the old American Express card from Costco, your account must be open and in good standing in February to receive your coupon. But just as in the past, the reward coupon can be redeemed at any Costco store by the end of the year for Costco purchases or for cash.
Cardholder benefits include a damage and theft purchase protection program that can repair your purchases or give you a refund if a covered item is damaged or stolen within 120 days of purchase. (90 days for New York residents). This card’s extended warranty coverage can also add a year to your manufacturer’s warranty of a covered item purchased with your card.
This card includes travel benefits such as as a trip cancellation and interruption policy that can reimburse you for certain non-refundable expenses if your travel is disrupted. It also includes worldwide rental car insurance, travel accident insurance and access to an emergency travel assistance hotline.
New accounts receive seven months of interest-free financing on new purchases, and a standard interest rate of 15.49% APR. There is no annual fee for this card with your paid Costco membership, but there is 3% foreign transaction fee.
If you are a small business owner, another option is the Costco Anywhere Visa® Business Card by Citi. It offers 4% cash back on eligible gas purchases for the first $7,000 spent per year, and then 1% on subsequent purchases thereafter. 3% cash back is earned at restaurants and on eligible travel purchases, 2% cash back is received from all other purchases from Costco and Costco.com. You receive 1% cash back on all other purchases. It also includes benefits such as extended warranty coverage, and damage and theft protection. And just as with the consumer card, there is no annual fee with your paid Costco membership.
Another option for small business owners is the Capital One® Spark® Cash for Business. This card offers new applicants a $500 cash bonus after spending $4,500 within three months of account opening. It also features 2% cash back on all purchases, with no limits.
Other benefits include a purchase security and extended protection policies. The purchase security policy offers coverage if your purchases are lost or stolen within 90 days of account opening, while the extended protection policy will double the length of your manufacturer’s warranty.
As a Visa Signature card, it offers a variety of travel and shopping discounts. It also features exclusive access to tickets for entertainment and sports events. There is a $59 annual fee for this card that is waived the first year, and no foreign transaction fees.
The Citi Hilton HHonors Reserve card is another good choice to use at Costco when you would rather earn travel rewards than cash back. New applicants can earn two weekend night certificates good at select hotels and resorts within the Hilton portfolio when they make $2,500 in purchases within four months of account opening.
You also earn 10 Hilton HHonors bonus points per dollar spent on hotel stays within the Hilton portfolio, 5x points per dollar spent on airline and car rental purchases, and 3x points on all other purchases. Points can be redeemed for free night stays at Hilton properties around the world.
With this card, you get immediate HHonors Gold status as long as you are a cardmember, which offers you benefits such as complimentary Internet access, late check–outs, and a fifth night free on award bookings of five nights or more. You can also earn top-tier Diamond status when you use your card to make $40,000 or more purchases within a calendar year. There is a $95 annual fee for this card, and no foreign transaction fees on purchases made outside of the United States.