If you’re a member, I’m sure you’ve been asked at one time or another to fill out a Costco credit card application… but should you do it or not?
When I first joined Costco, I held off on their TrueEarnings card. Why? Because store-affiliated cards are usually a bad deal. But once I researched it, I realized that it’s a beneficial program for Costco members. Here’s why the AmEx Costco card will save you money:
- 3 percent cash back at U.S. gas stations and on gasoline at Costco up to $4,000 per year in purchases, then 1 percent – Let’s face it, the last time gas was truly cheap was… well, I can barely remember that far back! So anything to save on gas helps, right? With this card you get a full 3 percent rebate on the first $4,000 spent annually on fuel purchases for your car (and 1 percent after that). That’s like getting a 12 cent discount per gallon when gas is $4.
- 2 percent cash back at U.S. restaurants – There are very few credit cards on the market that give higher rewards for dining out and the ones that do might only give it for a few months out of the year. This card gives you an unlimited 2 percent at restaurants all year long.
- 2 percent cash back on eligible travel purchases, including at Costco – You get an unlimited 2 percent cash back on your eligible travel purchases, such as airfare, hotels, cruises, car rentals, travel booking services, tour operators, etc. Remember: Most airline credit cards (with a hefty annual fee) typically give only around 2 percent rewards and that’s only on their associated airline. With this credit card from Costco you are getting 2 percent regardless of the company you’re buying from.
- 1 percent cash back on other purchases, including at Costco – All other purchases will be earning you 1 percent cash back, including your shopping at Costco.
With that type of earning power, even the average person might earn hundreds of dollars per year. In fact, I know a married couple in Michigan that are by no means big spenders (an elementary school teacher & nurse) and last Christmas they were telling me how with their regular middle-class spending, the Costco credit card rewards program earned them nearly a $500 rebate for the year!
Other unique benefits…
As if the rewards program wasn’t reason enough to apply, the American Express Costco card also gives you some extremely valuable benefits – at no additional cost – on qualified purchases. Consult issuer for terms and restrictions.
- Extended Warranty – AmEx will automatically double the original manufacturer’s warranty coverage, for up to one full additional year, on eligible purchases that come with a manufacturer’s U.S. warranty of five years or less.
- Purchase Protection – Ever accidentally damage something within 90 days of buying it – or worse yet – had it stolen? If either of those things happens on an eligible purchase, you can be reimbursed for up to $1,000 per eligible occurrence, excluding shipping and handling, up to $50,000 annually per credit card account.
- Ticket Savings Center – You get access to concert and event presales, preferred seating, and discounted tickets for select shows.
- Two memberships in one card – The Costco credit card will serve as both your Costco Membership card as well as your American Express card, so there will be no need to carry around both.
And not only will you be getting great rewards on travel, but also these travel-related benefits…
- Travel accident insurance – This benefit offers up to $100,000 in coverage in the event of dismemberment or accidental death during eligible travel. Consult the full cardmember documentation for details, exclusions, etc.
- Car Rental Loss and Damage Insurance – This benefit provides secondary coverage for both collision and theft of your eligible rental vehicle.
- Global Assist Hotline – Whenever you are more than 100 miles from home and encounter an emergency, this hotline is here to help and it won’t cost you a dime. For example, let’s say you get injured in a foreign country and need advice finding the right doctor. Or equally terrifying, you wind up in a legal bind in a country where you don’t speak the language. Or your bags, passport and money are stolen. Whatever the problem may be, American Express has setup this special 24 hour helpline to assist cardmembers.
What’s the annual fee?
Surprisingly, the Costco credit card’s annual fee is zero. As long as you are a paid-up Costco member, there is no annual fee for this credit card. As of April 2014, if you want a no-annual-fee cash-back rewards card, this is your best choice, period.
If you are not a Costco member and would like to join, when you apply for the credit card offer below you can sign up for a Costco Gold Star membership (which is $55 per year).
Updated March 27, 2014