Sunday, June 26th, 2016, 12:15 pm
Which Credit Card Should You Be Using At Costco? Here Are 10 Great Options (Including AMEX And Mastercard Options)
Last week Costco stopped accepting AMEX cards. You can only use Visa cards in stores now, so which card should you be using?
1. If you live in an area with Google Express you can still pay with AMEX and have in-store Costco items delivered to your front door by Google. And you can even get $15 off $15 for signing up and another $15 off $30 for each AMEX offer that you have.
Google Express even gives prepaid shipping labels if you need to return an item.
You do need a Costco membership to shop at Costco via Google Express. Unlike Instacart, prices for items are the same as they are in-store and in-store coupons and promotions are reflected in Google Express prices.
I have dozens of cards with the AMEX Offer and it’s hard to beat half off at Costco!
Unfortunately they only offer perishable items in select locations, so I still need to go to Costco for those items and for gasoline.
2. The Chase Freedom Visa has been aggressively going after Costco shoppers. You can earn 5 points per dollar for up to $1,500 in spending in Q2, another $1,500 of spending in Q3, and another $1,500 of spending in Q4. If you don’t have the card yet you will get 17,500 points for opening it, adding an additional user, and spending $500 in 3 months.
There’s no annual fee.
It’s important to note that you won’t earn 5 points per dollar if you swipe your Freedom card at Costco gas stations, as those are coded as gas stations and not warehouse clubs. However you can buy a Costco cash card online or in-store with your Freedom card to earn 5 points per dollar and then you can use that cash card at the Costco pump.
My local Costco gas station is often 20-50 cents cheaper per gallon than other gas stations. In Hawaii earlier this year I paid a full dollar per gallon less than other gas stations!
In fact, you can even give those Costco Cash cards to someone without a membership and they’ll be able to buy gas at the pump or shop in the store without needing to buy a membership.
You can lock in savings by stocking up on Costco cash cards each quarter.
By itself, 5 Freedom points are worth 5% cash back as Freedom alone can’t transfer points into much more lucrative airline or hotel miles, but if you, your spouse, or business partner has a Sapphire Preferred or Ink Plus card then you can transfer points from Freedom to one of those cards and from there to your favorite travel currency. You can read at the end of this post which currencies they can transfer to and why those points are much more valuable than just taking cash back. The Freedom card can also keep your points alive for free if you do close one of those cards.
The value of the points will be based on where you use them. On the grey market they can sell for around 1.6 cents each (making for an 8% rebate on Costco purchases), but if you use those points for a trip worth where they are worth 2 cents each then you’ll have effectively earned 10% back on those “5 point categories.” The sky is the limit of the value of airline miles as they aren’t tied to the cost of a ticket. That’s good for people in the know and bad for those who are not. 1 mile can be worth 0.25 cents or it can be worth 25 cents, it all just depends on how you use them!
3. The new Citi Costco Anywhere Visa Card offers 4% back on gas stations, including Costco gas stations (up to $7,000 annually), 3% cash back on restaurants and travel, 2% cash back at Costco and Costco.com, and 1% cash back elsewhere.
There’s no annual fee other than your Costco membership dues.
That’s a solid card, especially for the 3% and 4% categories. However rewards are only paid out once per year via a check that can only be cashed in Costco stores.
4. The Chase Ink Plus Visa or Ink Cash Visa offer 5 points per dollar at office supply stores and telecom and 2 points per dollar on gas and hotels or gas and dining. Ink Plus offers 60K points for spending $5K in 3 months and Ink Cash offers 20K points for spending $3K in 3 months.
These cards won’t be good for regular Costco shopping, but you’ll earn 2 points per dollar at Costco gas stations which will be worth even more when transferred into airline miles or hotel points. I’d consider that to be a 3.2% value on the grey market or a 4% value when used for travel.
5. The Chase Freedom Unlimited Visa offers 1.5 points per dollar everywhere. You’ll get 17,500 points for signing up, adding an additional user, and spending $500 in 3 months.
There’s no annual fee.
6. The BankAmericard Cash Rewards Credit Card offers 3% cash back on gas (including Costco gas) and 2% cash back on wholesale clubs and groceries on up to $2,500 per quarter. Plus you’ll get a bonus 10% cash back if you deposit your reward into a BOFA checking or savings account. You’ll also get $100 cash back for opening the card if you spend $500 within 3 months.
7. The Fidelity Rewards Visa Signature offers 2% cash back everywhere if you open a Fidelity brokerage account for the refund to be deposited into. There’s no annual fee.
8. The Barclaycard Arrival Plus™ World Elite MasterCard® offers 2 miles per dollar everywhere plus 5% of your miles back every time you use them. It also gives 50K bonus points for signing up and spending $3K in 90 days. The $89 annual fee is waived for the first year.
Costco stores only take Visa cards, however Costco.com still accepts Discover and Mastercards. You can buy Costco Cash cards on Costco.com and then use them for any in-store purchases or at Costco gas stations.
9. The Citi Double Cash Mastercard offers 2% cash back everywhere with no annual fee.
You can buy Costco Cash cards on Costco.com and then use them for any in-store purchases or at Costco gas stations.
10. You can buy Visa gift cards at office supply stores with a Chase Ink Plus Visa or Ink Cash Visa to earn 5 points per dollar. If you, your spouse, or business partner has a Sapphire Preferred or Ink Plus card those points can be transferred into miles.
Staples.com sells $300 gift cards for $308.95, which will earn 1,545 points. If you value the points at the grey market rate of 1.6 cents each that means you’ll earn $24.72 worth of points. After backing out the $8.95 fee you’re left with a $15.77 profit or a 5.26% rebate. If you value the points at a rate of 2 cents each when using them as airline miles or hotel points that means you’ll earn $30.90 worth of points. After backing out the $8.95 fee you’re left with a $21.95 profit or a 7.32% rebate.
You can then use those Visa gift cards at Costco.
Of course if you buy Visa gift cards when there’s a promotion that makes them cost less than face value you’ll do even better than that.
What card will you be using at Costco?