March 2015 update: Costco has announced that its relationship with American Express will end March 31, 2016. Beginning April 1, 2016, Visa will become the network for its stores, and Citi will issue its co-branded cards. In the meantime, our review below explores the card’s current terms and benefits.
If you belong to Costco as either a Gold Star or Executive Gold Star member, you’ve probably been strongly encouraged to apply for a Costco TrueEarnings credit card from American Express, a CreditCardForum advertising partner. But is the card worth getting?
When I first joined Costco, I held off on the TrueEarnings card for the simple reason that store-affiliated cards are usually a sub-optimal deal at best and a terrible deal a lot of the time. But once I researched it, I realized that this card offers a beneficial program — for those who already happen to be Costco members, that is. For others it would make no sense at all. Here’s how the AmEx TrueEarnings Costco card could potentially save you money:
- 3% cash back at U.S. gas stations for up to $4,000 per year in purchases. After that, you earn 1 percent back – Let’s face it, the last time gas was truly cheap was… well, who can remember that far back? 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% cash back at U.S. restaurants – There are very few credit cards on the market that give higher rewards for dining out — and some of the ones that do give it for only a few months out of the year. This card gives you an unlimited 2% at restaurants all year long.
- 2% cash back on eligible travel purchases, including at Costco – You get an unlimited 2 percent cash back on 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. That means you can compare prices, plan the itinerary that’s best for you and still get extra rewards, without being restricted to a certain airline or hotel.
- 1% cash back on other purchases, including at Costco – Other purchases will earn you 1% cash back, including your shopping at Costco. That’s the go-to cash-back rate for most rewards cards on the market.
With this rewards structure (which focuses on common, easy-to-hit spending categories), 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 TrueEarnings benefits…
As if the rewards program wasn’t reason enough to apply, the American Express Costco card also gives you a number of cardmember 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 — as long as that original warranty is for five years or less.
- Purchase Protection – Ever accidentally damage something within 90 days of buying it or 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 cash back 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. Exclusions apply for cars with an original MSRP above $50,000, as well as certain types of vehicles. See your cardmember contract for exact details.
- 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 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, this special helpline is available 24 hours a day to assist cardmembers.
What’s the annual fee?
The Costco TrueEarnings credit card’s annual fee is zero. As long as you are a basic Gold Star or executive Costco member, there is no annual fee for this credit card. If you want a no-annual-fee cash-back rewards card and shop at Costco this card probably deserves a place in your wallet.
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 by itself, so if you get the card the annual fee covers this annual store membership fee).
This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express.
Updated March 2, 2015