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September 7, 2017

Citi Costco Review: Is It Worth Applying?

Editorial Note: This content is not provided by the card issuer. Opinions expressed here are author's alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer.
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The Citi Costco card offers high cash back for gas and Costco purchases, but there are limitations to know before you apply. Read on for the pros and cons.

Overall Score

4.0

Rewards

4.0

Fees

4.0

Benefits

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

Pros and Cons

  • Cash Back Rate on Gas
  • Cash Back Rate at Costco
  • No Annual Fee with Paid Costco Membership
  • Requires Costco Membership
  • Foreign Transaction Fee

If you've got the space and more than one mouth to feed, buying in bulk can be a money saver. Warehouse stores like Costco sell large quantities of all kinds of items, making it so you can save a bit of money per item.

But the savings aren't only found in that double-size box of Frosted Flakes. You can gain additional savings by making use of the Costco Anywhere Visa credit card by Citi. This credit card lets you accumulate cash back with every purchase you make at Costco, plus some other places.

The biggest perk is 4% cash back on gas purchases (up to $7,000/year), while the biggest downside is you can only access the cash back you've earned once a year.

We'll help you determine whether this credit card is a good idea for people who shop at Costco religiously, who shop at Costco occasionally, or who rarely shop at Costco. Don't worry. Unlike other things you pick up at Costco, you don't have to get this card in bulk. You need just one, regular-size card to earn cash back on your Costco purchases.

Perks

Both the personal and business Costco Citi cards, which are Visa branded cards, offer the following perks. The Costco Citi credit card has no annual fee, as long as you keep your Costco membership active.

  • Rewards at Costco. When using this card, you'll receive 2% cash back on all purchases from Costco and Costco.com. There's also 4% cash back on gas purchases at Costco (up to $7,000 of annual gas purchases, after which the cash back drops to 1%).

  • Rewards elsewhere. You can use the Citi Costco card outside of the warehouse store too. You'll receive 1% cash back on all non-Costco purchases made with the card. When using the card at restaurants or with eligible travel purchases, you'll receive 3% cash back. And you'll receive 4% back when you fuel up at many non-Costco gas stations (the $7,000 cap mentioned above includes these purchases. Also know that gas purchases at superstores, supermarkets, and convenience stores would earn just 1%).

  • Introductory APR period. The card carries a 0% APR for new purchases for the first 7 months after you open the account. After the introductory period, a variable APR, currently at 16.24%, kicks in.

You'll get your cash back once per year in the form of a credit voucher that you can redeem for cash or merchandise at Costco.

Limitations

You can sign up for the Costco Citi credit card either online, over the phone, or in the store. But you will have to provide your Costco membership number to sign up for the credit card, because this card is only available to Costco members. A Costco membership carries an annual fee that varies, usually between $60 to $120, depending on the level of membership. Only members can shop at Costco.

Another limitation is that you only can redeem your cash back once per year, which is different from many cards that give you access to rewards and cash back on a much more regular basis.

Doing the Math on Costco Purchases

Costco Business Center
Costco Business Center © Lisa Pinehill (CC BY-SA 2.0) via Flickr

The Costco Citi card really provides a nice benefit to those who do a decent chunk of their shopping at Costco.

  • Heavy Costco shoppers. Let's say you spend $3,000 on gas at Costco every year, plus another $150 per week on Costco purchases. This would roughly result in cash back of $120 for the gas and $156 on Costco purchases. That's around $276 per year in cash back, which will easily justify your annual Costco membership fee and perhaps a week of purchases at Costco. Not bad for using the card at a place you would shop anyway.

  • Mid-range Costco shoppers. For someone who uses Costco an average amount, the cash back would be quite a bit less. Let's say you spend $1,200 on gas at Costco every year and $80 per week on Costco purchases. That's good for cash back purchases of roughly $48 on gas and $83 on Costco purchases. That means the total cash back each year is around $131. Again, this would cover your annual membership fee for the warehouse and a few Costco purchases, so it's a nice benefit.

  • Infrequent Costco shoppers. Let's say you don't shop at Costco all that often, spending about $500 per year on gas and $40 per week on items at Costco. This would give you about $20 in cash back on gas and about $41 on Costco purchases. This would be roughly $61 in annual cash back, barely enough to cover the lowest level of Costco membership.

  • Other shoppers. Keep in mind that you can gain additional cash back outside of Costco, as long as you're taking care to participate with eligible providers. If you have a restaurant you visit regularly or make travel purchases that are on the eligible list for the 3% cash back, this is a nice feature and you stand to get nice rewards in return. Find an eligible non-Costco gas station for the impressive 4% cash back level too. And don't forget the 1% you receive on all purchases that don't qualify for a higher percentage level. These numbers will add up nicely over time if you use the card regularly.

4 People Who Would Benefit from This Card

  • Frequent Costco customers. As we spelled out earlier, this card really works well for those who do quite a bit of shopping at Costco. The 2% cash back on purchases from Costco is nice to receive without having to change your shopping habits.

  • Frequent gas purchasers. If you drive a lot of miles every year and if you often purchase gas at Costco locations, this card's 4% cash back level is impressive. Or if you have a 4% eligible gas station near your home or work, this is a nice option. In fact, the cash back on gas is the card's best feature. Keep in mind, the 4% on gas is capped at the first $7,000 in eligible gas purchases per year.

  • Frequent travelers. The 3% cash back on eligible travel and restaurant purchases is another nice perk of this card. However, you do have to be careful that you're only making purchases at places that are eligible for the 3% rate.

  • Big purchase at Costco. If you plan to make a big-ticket purchase at Costco, you can sign up for the card and take advantage of the 7-month intro APR period on purchases to pay the item off over time. As long as you can pay it off before the low APR expires, this is a nice benefit for those who don't yet have the card.

5 Reasons Why We Like It

  • No annual fee with paid Costco membership. It's nice to not have to worry about an annual fee with this card. (Of course, you're already paying an annual fee to be a member of Costco.)

  • Introductory 0% APR period on purchases. After that, a variable APR of 16.24%. If you want to carry a balance for the first few months you have this card, the introductory 0% APR period is great.

  • It's simple. If you shop at Costco regularly, you can just have your annual cash back applied to a regular Costco purchase. This keeps things extremely simple. Besides the wait, there's no jumping through hoops to redeem points - you don't have to do any calculations to wonder if you have enough points to get what you've earned. The only reward available is cash.

  • Variety of purchase options. Costco carries so many different items, this card has a lot of flexibility. You can receive the 2% cash back on a wide variety of things as long as you buy them at Costco, such as medications from the pharmacy, eyeglasses, tires, kitchen appliances, food, and many other items.

  • Cash back on gas purchases. If you drive a lot, the 4% back on eligible gas purchases is the card's best benefit. Just make sure you're filling up at Costco gas pumps or at other eligible gas stations that participate in the 4% cash back (on up to $7k/year in gas purchases).

5 Reasons We'd Skip the Card

  • You have a card with better options. You may be able to find a Visa credit card that offers better reward points or cash back than what the Costco Citi card offers, even on Costco purchases. The primary benefit of this card is its 2% cash back on Costco purchases, so if you already own a card that matches that reward level, you don't really need this card. Just use that equivalent card at Costco.

  • You're looking for balance transfers and other "extra" features. The 0% APR for the introductory period for the Costco Citi card doesn't apply to balance transfers. Many other cards out there have this feature, so we'd look to those cards instead. And this card doesn't offer a lot of beneficial features on things like cash advances; other cards have better fee rates and lower percentages on these extras. And there's no sign-up bonus.

  • The introductory APR period isn't long enough. For some people, the 7-month 0% APR introductory period on purchases isn't long enough to pay off a big ticket purchase from Costco. You'll probably be able to find a better option with a longer introductory 0% APR period with another card.

  • You don't buy a lot of gas. This card's best feature is the cash back on gas purchases at Costco or eligible gas stations. So if you don't drive much, you won't be able to take full advantage of this card's biggest benefit.

  • You want immediate benefits. You can only receive the cash back benefit once per year, so you'll have to wait for your reward. Many other cards give you much more frequent access to your cash back or points earned.

How It Compares

If you like to travel, consider the Chase Sapphire Preferred.

 

Citi Costco

Chase Sapphire Preferred

 

Interest Rates and Fees

Introductory APR for Purchases0%* introductory APR for 7 months on Purchases*N/A
Purchase APR16.24%* (Variable) based on your creditworthiness and other factors16.99% to 23.99% Variable based on your creditworthiness and other factors
Balance Transfers APR16.24%* (Variable) based on your creditworthiness and other factors16.99% to 23.99% Variable based on your creditworthiness and other factors
Foreign Transaction Fee3% of each purchase transaction in US dollars. No fee for purchases at Costco worldwide.No foreign transaction fee
Annual FeeNo annual fee for this credit card with your paid Costco MembershipIntroductory Annual Fee of $0 the first year, then $95
 

Benefits and Features

Points Deal Introductory Bonus Reward Points: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
Cash BackCash Back Rewards: Earn 4% cash back on eligible gas purchases for the first $7,000 per year, and then 1% thereafter. Earn 3% cash back on restaurants and eligible travel purchases. Earn 2% cash back on all other purchases from Costco and Costco.com. Earn 1% cash back on all other purchases. 
Travel Travel Rewards: 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide.
1:1 point transfer to leading airline and hotel loyalty programs
Airline Airline Rewards: 1:1 point transfer to leading airline and hotel loyalty programs
Hotel Hotel Rewards: 1:1 point transfer to leading airline and hotel loyalty programs
Points Point Rewards: 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide
GasGas Rewards: Earn 4% cash back on eligible gas purchases for the first $7,000 per year, and then 1% thereafter. 
RestaurantDining Rewards: Earn 3% cash back on restaurantDining Rewards: 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide
Airline Transfer Partners Airline Transfer Partners: Airline transfer partners include United Airlines, Southwest Airlines, British Airways, Air France, Korean Air, Singapore Airlines, and Virgin Atlantic.

Citi Costco: Pricing information including interest rates, rewards, benefits and fees was obtained on June 20, 2017 from published websites and is believed to be accurate, but not guaranteed.

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.

If you want the same cash back rate for every purchase, consider the Chase Freedom Unlimited.

 

Citi Costco

Chase Freedom Unlimited

 

Interest Rates and Fees

Introductory APR for Purchases0%* introductory APR for 7 months on Purchases*0% introductory APR for 15 months
Introductory APR for Balance TransfersN/A0% introductory APR for 15 months
Purchase APR16.24%* (Variable) based on your creditworthiness and other factors15.99% to 24.74% Variable based on your creditworthiness and other factors
Balance Transfers APR16.24%* (Variable) based on your creditworthiness and other factors15.99% to 24.74% Variable based on your creditworthiness and other factors
Annual FeeNo annual fee for this credit card with your paid Costco Membership$0 annual fee
 

Benefits and Features

Cash Back Deal Introductory Bonus Cash Back: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
Cash BackCash Back Rewards: Earn 4% cash back on eligible gas purchases for the first $7,000 per year, and then 1% thereafter. Earn 3% cash back on restaurants and eligible travel purchases. Earn 2% cash back on all other purchases from Costco and Costco.com. Earn 1% cash back on all other purchases.Cash Back Rewards: Unlimited 1.5% cash back on every purchase - it's automatic!
GasGas Rewards: Earn 4% cash back on eligible gas purchases for the first $7,000 per year, and then 1% thereafter. 
RestaurantDining Rewards: Earn 3% cash back on restaurant 

Citi Costco: Pricing information including interest rates, rewards, benefits and fees was obtained on June 20, 2017 from published websites and is believed to be accurate, but not guaranteed.

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.

Final Thoughts

The Costco Citi credit card isn't for everyone ... then again, it isn't really aimed at just anyone. This card works best for those who frequently shop at Costco and who want to keep things simple.

If you already shop at Costco, you'll receive 2% back on all of your non-gas Costco purchases, while receiving 4% back on Costco gas. That's an excellent reward level for a card that has no annual fee (with paid Costco membership) and doesn't force you to change your shopping habits at all. (As with any credit card reward program, you'll only receive the greatest benefit from the Costco Citi card by paying off your balance every month, so keep that in mind before signing up for the card.)

For people who infrequently shop at Costco, you may have a card that better fits your needs already in your wallet. However, if you don't mind using multiple credit cards, you could obtain this card and only use it at Costco for gas and other items to maximize its benefit level. Following this path, even an infrequent Costco shopper can probably earn enough cash back on card purchases made at Costco to justify paying for an annual membership to the warehouse club.

So if you're already a Costco member and you don't mind having multiple credit cards, obtaining this card to use primarily at the warehouse is a smart idea. As an added bonus, the Costco Citi credit card can also serve as your membership card, meaning you won't have to carry an extra card. The Costco Citi credit card certainly isn't perfect, but it's a card that'll work well for the right person.

Editorial Note: This content is not provided by Citi. 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 Citi.

Disclaimer: This content was first published on September 7, 2017. Information including APR, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check Citi 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.

More from CreditDonkey:


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Chase Sapphire Preferred Review


Chase Freedom Unlimited Review

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Compare Citi Costco to:

Compare Citi Costco vs Chase Sapphire Preferred
Apply for Chase Sapphire Preferred Card
At Chase's Secure Site
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
N/AN/A
16.99% - 23.99% Variable
Introductory Annual Fee of $0 the first year, then $95

Compare Citi Costco vs Chase Freedom Unlimited
Apply for Chase Freedom Unlimited
At Chase's Secure Site
  • Unlimited 1.5% cash back on every purchase — it's automatic
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.99-24.74%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% for 15 months
0% for 15 months
15.99% - 24.74% Variable
$0

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