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Updated December 4, 2014

American Express Costco Card Review: Earn Cash Back at Costco

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Costco shoppers looking for rewards on their in-store and gasoline purchases should check out the TrueEarnings Card from Costco and American Express. There is no annual fee for active Costco members.

4/27/2015 Update: TrueEarnings® Card from Costco and American Express is no longer available on CreditDonkey. This offer may have been discontinued or may no longer be available to new applicants.

Overall Score

4.0

Rewards

5.0

Interest Rates

3.0

Fees

4.0

Benefits

4.0
5-point scale (the higher, the better)

Pros and Cons

  • Excellent cash back
  • Costco membership card
  • Gas cash back
  • Cashback expires

Bottom Line

Excellent cash back card for Costco members

Did you know: Costco now only accepts Visa credit cards. The Citi Costco credit card offers cash back on all purchases, including at Costco.

Costco American Express Review

This credit card is an American Express card and Costco Membership Card in one, so you only need one card in your wallet. It is also one of the very few credit cards that you can use to pay for your purchases at Costco (since Costco only accepts American Express for credit card payment).

The card also features cash back opportunities, especially if you utilize your credit card for most of your purchases. With this card, you earn 3% for your first $4,000 in gasoline purchases annually at US gas stations, which equals up to $120 back in your wallet simply for using your card on gas. After you reach the $4,000 limit, you will earn 1% on all remaining gas purchases for the rest of the year.

You also earn 2% cash back at US restaurants, and 2% on eligible travel purchases, as well as 1% for virtually all other purchases, including those made at Costco. Some cash back cards exclude warehouse clubs from their cash back earnings, or they limit those earnings to 0.25% to 0.50%. This makes the 1% cash back on Costco purchases a benefit for cardholders who go to Costco on a regular basis.

© Robert Neff (CC BY 2.0) via Flickr

Here are some important things to know about this cash back program:

  • Gasoline must be purchased from Costco or a domestic stand-alone gas station in order to accumulate bonus rewards; gas purchased from other warehouse clubs or supermarkets are excluded from the bonus.

  • Cardholders receive their cashback reward on an annual basis through the form of an in-store coupon. The coupon can be redeemed at any U.S. Costco for merchandise or cash. It’s important to know that the coupon expires on August 31st following its issue, so cardholders will want to redeem the coupon when they receive it in the mail.

3 Reasons Why You Should Consider This Card

  • You want to consolidate the cards in your wallet: Since this is an American Express card and Costco Membership Card in one, you need only this one card when you go to the warehouse — and if you decide to use it for your everyday shopping needs as well (to get 1% back on eligible purchases).
  • You do a ton of shopping at Costco throughout the year: If you frequently shop at your local Costco, you will benefit from the rewards coupon you get in the mail once a year.
  • You commute a lot or take your kids around town a lot: Earning 3% back on gas (on up to $4,000 in gasoline purchases annually at gas station in the U.S.) is better than earning just 5 cents a gallon that some other gas credit cards offer.

3 Reasons Why This Should Not Be Your Next Credit Card

Consider another card that will reward you in a similar way if any of the following apply to you:

  • You rarely go to Costco: If you’re an occasional shopper, you may miss out on the window for the rewards program. The coupon will come out with an expiration date of August 31.
  • You’re impatient: Once a year is not very much in the world of rewards redemption. Other credit cards give you much more control over when and how you redeem rewards.
  • It has limitations: There is a cap of $4,000 on gas purchases that get the 3% back. It also has no signup bonus whereas many credit cards do. And, strangely, it has no bonus rewards on groceries (you can get a high as 6% back with some other cards on such purchases).

Benefits

With American Express cards comes an expected level of service and benefits, and cardholders receive both with this card. Benefits include car rental loss and damage insurance, travel assistance, extended warranty service, purchase protection and the American Express Ticket Savings Center:

  • Car Rental Loss and Damage Insurance – coverage for theft or damage on eligible vehicles when you utilize the card to reserve and pay for auto rental

  • Travel Assistance – American Express is available to offer medical, legal, financial or other emergency assistance while you are traveling more than 100 miles from home.

  • Extended Warranty – extends the manufacturer’s warranty for up to one additional year for eligible purchases made with the card

  • Purchase Protection – provides cardholders with 90-day coverage from date of purchase for any theft and accidental damage to eligible purchases for up to $1,000 per occurrence

  • American Express Ticket Savings Center – cardholders get access to this benefit, which provides ticket savings while earning cash back

Interest

In our opinion, the APR isn’t the lowest of rates currently available for credit cards, but it certainly isn’t bad when you compare it to other cards we have reviewed. Also, this American Express card has no annual fee (when cardholders pay their annual Costco membership fee).

Costco American Express vs Executive Membership

There’s another way to earn rewards for your Costco purchases. If you upgrade your Costco membership by spending an additional $55 every year, you can have “executive membership,” which entitles you to 2% back on your purchases at the warehouse (say you spent $9,600 a year at Costco, you’d get $192 back). An annual rewards certificate will be sent to you, similar to how Costco handles the American Express card. You may prefer this option if you don’t want to take on another credit card and you don’t mind paying extra for getting these rewards — you have to spend at least $2,500 each year to break even.

Why Costco Takes Only American Express

Does Costco accept credit cards? Yes, only American Express. Costco and American Express have a business partnership that gives the credit card company exclusivity and a grip on a guaranteed source of revenue (credit card companies receive a percentage of purchases made with their cards from retailers). This decade-plus deal recently fell apart in Canada, where Costco stores there now only accept MasterCard.

Bottom Line

Shopping at Costco
Shopping at Costco © David McKelvey (CC BY 2.0) via Flickr

Between the Costco benefits, cash back and purchase protections, in our opinion, this card is an excellent everyday card for consumers who shop at Costco. Remember, as with all credit card offers, terms and limitations apply.

4/27/2015 Update: TrueEarnings® Card from Costco and American Express is no longer available on CreditDonkey. This offer may have been discontinued or may no longer be available to new applicants.

Meghan C is a contributing writer at CreditDonkey, a credit card comparison and reviews website. Write to Meghan C at meghan@creditdonkey.com

Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: This content was first published on September 30, 2011. This content may have been updated on December 4, 2014. Information including APR, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check American Express website for updated information.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the Costco Anywhere Visa® Card by Citi has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

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