Costco Credit Card Review

Posted by CreditCardGuru

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

46 comments... read them below or add your own

  1. Yenny March 22, 2014 at 7:28PM

    Hi,
    I’ve just applied for the credit card at Costco, and the employee called the American Express to sign up for the card. Then, about 10 minutes later, they called back (through my cell phone number) to confirm the information(SSN,DOB and address). Is that part of the application process or we have to confirm with Costco first?
    Thanks!

  2. AF March 16, 2014 at 12:26PM

    Does IRS consider the earned cash money rebate a taxable income?

  3. Fred March 5, 2014 at 9:42PM

    Eligible travel purchase,hmmm… Does my purchase at Priceline or Hotwire qualify as travel purchase?

  4. Eric January 14, 2014 at 7:35AM

    I felt having the Costco AMEX card made it easier for me to spend way more money in the store I otherwise might not have spent, The rewards do add up but if you don’t cash the award check the same year by August, It becomes expired “worthless” I called AMEX after finding the reward check that is sent by mail in the back of the statement and they would not honer or reissue the found expired check, I was so upset, I canceled the card. Yes, This was my fault, But no customer service like I expect from Costco from AMEX and I have great credit.

    • credit January 19, 2014 at 8:41AM

      What are the approval odds if you have zero credit?

    • Phred February 12, 2014 at 8:24AM

      Good info to remind people to read the terms and conditions when getting a new card so they don’t run into such surprises. Not sure why it’s Costco or Amex’s fault when someone doesn’t pay attention or follow directions though.

  5. Berle Bledsoe January 12, 2014 at 8:37PM

    I heard the other day that the American express Business cards are not insured or covered if stolen, and the full amount charged buy the thief must be paid by the card holder..Is this true?

    thanks
    Berle

  6. John Barnes January 4, 2014 at 2:05PM

    A big negative I encountered was that AmEx has not reported my considerable use of this card and spotless payment record to the credit bureaus. After many years of use I found that I have “no credit,” only what could be established from occasional use of a bank Visa card. AmEx says it is a “business” card, so it won’t report to the credit bureaus. Then how about Dun and Bradstreet? I don’t see it there. We don’t report on “small” businesses (I’m a solo lawyer). Glad my house-buying days are over. Having a substantiated credit rating is mighty helpful in buying a house, or a car, for that matter.

  7. John Barnes January 4, 2014 at 2:02PM

    A big negative I encountered was that AmEx has not reported my considerable use of this card and spotless payment record to the credit bureaus. After many years of use I found that I have “no” credit, only what could be established from occasional use of a bank Visa card. AmEx says it is a “business” card, so it won’t report to the credit bureaus. Then how about Dun and Bradstreet? I don’t see it there. We don’t report on “small” businesses (I’m a solo lawyer). Glad my house-buying days are over. Having a substantiated credit rating is helpful in buying a house, or even a car, for that matter.

    • credit January 19, 2014 at 8:42AM

      I guess I have my answer here, if the card reported to the bureaus approval odds would be low, so therefore approval is probably guaranteed

  8. John January 3, 2014 at 7:56AM

    Can Membership award points from an Amex Blue account be transferred to a Costco Amex card account?

  9. Lyle R December 28, 2013 at 4:04PM

    We got this card when we joined and we earned 77 dollars and we were not big spenders this more than covered the membership cost and the apr is very reasonable by today’s standards good card!

  10. Barbara weinbaum December 26, 2013 at 6:53PM

    I want to make an autopay payment how do I do that?

  11. Le December 14, 2013 at 8:48PM

    Hi! This is the first time I apply for Amex Costco card. I don’t know how to pay for the purchases I made with this card in Costco. Will they all appear in my credit card report each month? Or I have to write a check to transfer money from my personal bank account to American Express?

    • JoeyNutz January 10, 2014 at 9:42AM

      You’re kidding, right?

      • Kevin January 28, 2014 at 10:30AM

        Sadly, I don’t think so.

  12. Yolanda November 28, 2013 at 2:26PM

    I am the secondary member on our Costco membership. Can I change my Skymiles Amex card for a Costco Amex card?
    Have been paying our yearly membership with my Skymiles Amex card for years.

    Thank you

  13. David November 22, 2013 at 5:02PM

    I already have an AMEX card but am not a Costco member. How will this deal shake out for me?

  14. Mel October 28, 2013 at 10:35PM

    Does anyone know if you can do an in person cash payment on your AmEx Costco card at your nearest Costco?

    • Kirsten November 6, 2013 at 6:32PM

      According to my local Costco, all payments have to made online through a bank account.

    • CM Hall February 7, 2014 at 1:15PM

      You can’t

  15. Mai September 25, 2013 at 8:08AM

    Do you have to pay the full balance on the TrueEarnings® Card from Costco and American Express or can you pay partially over time?

    • angie October 11, 2013 at 9:35AM

      no…I’ve had this card since 09 and minimum payments are an option.

  16. Ron September 17, 2013 at 11:00AM

    Just an FYI.

    It appears that they changed the way the calculate the Costco AmEx rebate. I noticed that the last couple of months.

    Before, it looked like monthly, they took the total spending in each of the three categories, and applied the appropriate percentage.

    Now, it looks like each individual transaction is calculated and rounded down. So if you spend 99 cents on a 1% item, you don’t earn any rebate on that transaction.

    I know it is only a penny per transaction, but it does add up. If you have 200 transactions a year, that could mean $2 difference.

    So if you are getting gas, and the pump stops at $30.98, adding the extra 2 cents, will let you earn and additional cent.

  17. Vania September 3, 2013 at 10:33PM

    Is the primary Costco member the only one eligible for Amex cc or can spouse apply too?

    • Elizabeth November 27, 2013 at 8:06AM

      I had a Costco membership and the Amex before I got married. After the wedding, I took the hubby into Costco and added him to my membership. Once he had a membership #, I could go online to my Amex account and add him to that as well. Easy!

  18. Rob August 13, 2013 at 10:58AM

    Let’s ask Dave Ramsey about this card.

  19. JimC July 28, 2013 at 8:33PM

    I’ve had a Costco AmEx card for over a year now, and the advantages for this card are all true; however, there are a couple of disadvantages:
    - Don’t forget to pay off the card’s full amount every month so you avoid interest; because my APR is a whopping 27.24%
    - The AmEx card won’t link with my BillPay service, like many of my other bills. For example, for some bills, I can say pay the full balance, rather than specifying some fixed dollar amount. With AmEx, I can only specify to pay a fixed amount (to make sure I don’t get a late fee).
    - They don’t have the ability to generate virtual cards for online purchases. For example, BofA’s credit cards have a “ShopSafe” feature, where one can generate a virtual card number, attached to their real card number, and both the card limit and expiration date can be specified when the card is generated. If one generates a virtual number for each online transaction, for the same of slightly over the amount of the purchase, the number becomes useless after the purchase. I think this is the best fraud protection one can have.

    When all is said and done, I’ve still received more rebate than interest fees; so I’d still recommend the card.

    • Alex November 23, 2013 at 7:35AM

      The was a penalty APR. Pay your bills on time and the APR is much more reasonable.

    • Jeff Bellamy December 14, 2013 at 11:09AM

      Just set up Auto Pay on the AmEx side

  20. Allie July 13, 2013 at 9:26AM

    Do you need to spend a certain amount of money every month/year in order to have an Amex? Or keep some minimal balance on it? Or can you have one and spend zero money all year and still be a member?

    • JimC July 28, 2013 at 8:42PM

      You don’t have to spend any money, but your Costco membership will be charged to the card, and you’d be foolish to use a different card for purchases that didn’t have as high a rebate as the Costco AmEx card.

      I first applied for my card just before an RV road trip of about 4500 miles, and, at roughly 10 MPG towing a trailer, and a rough average estimate of $3.75 per gallon, would return about $68 of rebate (I get 4% back for gasoline purchases; this seems different from what others have said). Another way to look at this is the discount of 15 cents per gallon (@ the $3.75/gallon price).

      You should also know that the rebate comes in the form of a check which can be cashed at Costco (expires after 6 months, though).

    • angie October 11, 2013 at 9:37AM

      for 2 years i didn’t use my card. i was just paying it off. there’s no minimum purchases necessary.

  21. Parcival July 5, 2013 at 5:41PM

    They had to make a very special deal with Costco for them to accept American Express credit cards. This special deal also includes that COSTCO is not to accept other credit cards, not Visa, MasterCard, Discovery or other, only Debit cards. Stinks like high heaven of kickbacks or similar.

    Costco otherwise is a great place to save money.

    • Mike December 17, 2013 at 4:16PM

      That isn’t true.

    • Kevin January 28, 2014 at 10:34AM

      I believe the only “deal” they made was negotiating a lower merchant fees for accepting the card. Other cards can hit the merchants with fees as high as 6% of the total charged.

  22. Crystal May 1, 2013 at 2:33PM

    Costco is the card for me. Great savings.

  23. Jessie April 10, 2013 at 5:32AM

    I love the rewards program.

  24. Ray Olson December 29, 2012 at 10:27AM

    When is the Costco AMEX rewards anniversary cut off date for purchases? Rewards are paid in February based on what cut off date? – Thanks

  25. Al October 17, 2012 at 9:21AM

    Does Costco accept the American Express Gold Card? I think it is the best Credit Card out there anywhere.

    • Michael October 17, 2012 at 5:10PM

      Yes you can use that card at Costco.

  26. Julianne O’Boyle April 18, 2012 at 12:28PM

    I am a current Costco member & have been since around 1990. I still carry around my old card, which I have never turned into a charge card (it still says “Price Costco”). How do I change that current card into a card in which I can charge my purchases on? Can I? Is there a fee involved? Do I have to go to a Costco location to do this? Thx.

  27. Fred Vollmer March 3, 2012 at 12:08PM

    We are Costco members here in Naples Fl and we also now hold American Express Blue cash card. However for first 6500.00 we earn nothing, and after most of time we don’t get anything for gas. Our billings looks like we are getting screwed over. Is this card a better bet for us, and do they pay on all purchases, or only after you have charged so much??

    • Michael June 12, 2012 at 5:59PM

      Yes I would definitely say the Costco card is a better idea! You get the full rewards starting from the very first dollar spent (unlike your other card).

      • Ana October 27, 2013 at 7:36AM

        I have a question i know the Costco American Express card allows you to put a member on the card. Does that member establish credit in the process? My mother just opened the card and placed me on both the Costco store card and Costco amex credit card. Im 21 yrs old & already have my own well fargo platinum credit card but; i need more credit cards to create more credit. I would be the only one using the amex card, making also high purchases & would be making the checks to pay with my name from my personal bank account.

        Thanks! Ana

    • Dave March 27, 2014 at 5:47AM

      American Express is a money grubbing corporation! After being a loyal customer since 2008 and never missing a payment they raised my interest rate from 12 to 16% and my FICO is 760(nothing incredible but not bad). I used to carry a $1700 balance but paid it off a couple months ago so it is now zero. I think this pissed them off because now they get zero interest..Want to make these guys pay? Make lots of small charges that qualify for the cash back then pay off he balance at the end of the month! Thats my plan

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