Costco is not a store you can't live without. If you don't like it, don't shop there ...
But since we're here to talk about credit cards moreso than stores, I will just say again that if you are already a member or want to become one, this card is one of the better cards available. 4% on gas is outstanding. 3% on dining is very good. 3% on travel is very good. 2% at Costco is a plus. Being Citi is a plus to me, though opinions may vary about that. There is no AF. If you look at a Costco membership as an AF, you are in the wrong place, because again, this card only makes sense if you want to be a member anyway. It does not make sense, at least for most people, to join simply for the card.
The Sam's Club card is also a good value if you would be a Sam's member anyway. Though, it's Sync Bank. I am a member of both clubs, but went with the Costco card because I prefer Citi to Sync. JMO.
It's good that there are options in the market.
@xenon3030 wrote:Here is the summary of Citi Costco Visa card:
- 4% on gas (7k/year).
- 3% on dining/travel.
- 2% on purchases at Costco.
- 1% on the other purchases.
- No SUB. Needs Costco membership (fee) and no Costco AF waiver in the first year.
Here are my reviews on each cashback cateogry vs other cards in the market:
- 4% cashback on gas is nice but if you have EV, it cannot get used.
- 4% dining is available via other cards (e.g. US Bank Altitude Go). 3% travel is available via BOA Custumized Cash Rewards. Other travel cards (w/ and w/o AF) can also provide better cashback or MR.
- 2% cashback is limited to Costco purchases while the Citi double cashback can get used everywhere. There are plenty of Visa cards with 2-5% cashback.
Therefore, if you have some cards mentioned above, there might be no need to get this Costco card. Please provide your experiences on shopping at Costco.
This is two different discussions IMO, @xenon3030. First is the experiences on shopping at Costco or Costco.com. Second is how the Citi/Costco card stacks up against other options.
My family and I have always found shopping at Costco to be a great value. While I agree that if you go at busier times, parking and crowded stores can be a challenge. (Weekends and pre-holiday shopping can be very busy, such as a couple of days before Thanksgiving, Easter, or Christmas.) My schedule allows me to shop during the week and I just try to avoid busier times or to temper my expectations. And yes, it's a good idea to pickup empty boxes as you shop since no bags are provided, but I already do that at Aldi also. No biggee. These are all minor inconveniences to me in the context of value received. I don't know of any other store that offers essentially an unlimited return policy on most products, regardless of when you bought them. (There are a few exclusions.) Customer service and quality of merchandise has been great, and the cost savings are high. See more of my comments from a recent thread at the link below.
https://ficoforums.myfico.com/t5/Credit-Cards/Citi-Costco-product-change/m-p/6120541#M1741798
I wanted to put the earnings rate of the Citi Costco card into the proper context. The Citi version of the Costco card premiered in 2016 and replaced the American Express exclusive relationship with Costco and the AMEX "True Earnings" Costco card. The card rewards haven't changed in five years, so perhaps a refresh might be needed. To be fair, some of the cards someone would compare the Costco card to haven't been around nearly as long. And for comparison to other cards in 2016, the Costco card had some very strong points. It's entirely possible that Citi or Costco could enhance and update the card at some point.
Comparing the Citi Costco to the AMEX True Earnings:
The AMEX "True Earnings" Costco card earned 3% back on gasoline (up to $4K annually), 2% back at US restaurants and for travel, and 1% on everything else. The Citi Costco card earns 4% on gasoline (up to $7K annually), 3% on restaurants and travel, 2% at Costco or Costco.com and 1% on everything else. The Citi version was clearly better. Read a little more at my previous thread below.
The average credit card that pays 2% to 5% on some selected category has a base earnings rate of only 1%. There are few exceptions. These cards are designed for a consumer to consolidate spending and earn a relatively high overall earnings rate on selected categories, earn some rewards on all purchases, and without having to carry a bunch of cards. They aren't designed for rewards optimizers such as many of us on My Fico. In that respect, the 1% base earning rate is a moot point to most of us. We're going to use the better 1.5%, 2%, or 3% options in our wallet.
The 4% year-round on gas is still highly competitive with the best returns on gasoline. My Citi-Costco card still gets the bulk of those purchases when I don't get a higher 5% return on Discover or Freedom. Sure, if someone has an EV (or lives in the city and has no car at all), that might not be a huge category for them. Can you beat 4%? Yes, but it's with a very limited number of other options.
The 3% on all dining and travel, uncapped, is still very competitive for a card with no AF. (Keep in mind the comments above from @KJinNC that the Costco membership is not truly equivalent to an AF since those of us who carry the card find enough value in a Costco membership to pay it regardless of the card.) In 2016, getting 3% back on uncapped dining or travel in a no-AF card was exceptional. Until I changed strategy to premium travel cards and picked up the Chase Sapphire Reserve, American Express Gold, and Bank of America Premium Rewards in the last three years, my Citi Costo was a valuable card to have for those categories. (All three of my newer card have better earnings in either cash-back or travel than the Costco card.) My Citi Costco card got the bulk of my dining-travel spend from 2016 to 2018. And if I were to ever want to go back to a no-AF approach, it's still a very competitive card in those areas, even with the enhanced rewards offered on some newer cards. Consequently, I find value in keeping my Costco card as a backup for those categories.
In 2016, there were many fewer 2% uncapped and uncategorized cash-back card options. Citi Double Cash was still fairly new at that time. In my case, as many other consumers, the best flat-rate cards I had in my wallet paid 1.5%. (Quicksilver and Freedom Unlimited.) That 2% at Costco and Costco.com was also very attractive. Cards paying 2% or higher have really expanded in the recent years. Since I got on My Fico, I've added several others myself that match or outearn the Costco card's 2% rate at Costco. So yes, that is lackluster ... IF someone has other options already paying that well or IF they want to add the complexity of multiple cards.
As to the highest-earnings card from Costco, I'll include a link from my reply to a similar thread you started in May. For those who can attain Platinum Honors status in the Bank of America Preferred Rewards program ($100K+ in assets with BofA), the Customized Cash Rewards can pay 3.5%* (up to $2500 quarterly) on top of the 2% earnings of an Executive membership (less the $60 additional AF over the Gold Star membership.) That is potentially a gross return of 5.5% (net return of less after including the $60.)
(*2.00% x 1.75% Platinum Honors Bonus)
Similarly, someone could earn 5% with either the AOD FCU Visa card with an Executive membership, (OR) 5% with the BofA CCR card with Platinum status ($50K+ in assets) combined with an Executive membership. (*CCR of 2.00% x 1.50% Platinum Bonus)
Similarly, someone could earn 4.5% with the BofA CCR card with Gold status ($20K+ in assets) combined with an Executive membership. (*CCR of 2.00% x 1.25% Gold Bonus)
The caveat is that the first $3K in spend would be needed at 2% to overcome the $60 additional AF before extra earnings could be claimed. For low spenders, the Executive membership might not be cost-effective. Costco also limits the total Executive bonus to $1K annually per member. That means that $50K is the highest spending to claim Costco's 2%. For high spenders, because of the $10K annual cap on BofA CCR, you'd need five CCR cards to continue to get that level of return before you hit Costco's maximum limit.
https://ficoforums.myfico.com/t5/Credit-Cards/Credit-card-suggestions-in-2021/m-p/6346073#M1780343
Getting 4% total with any basic 2% card and the 2% of the Executive membership is also an excellent combination. With either the AOD FCU 3% or the 2% cards, you could achieve that 5% (AOD) or 4% (2% cards) up to the $50K Costco limit with only one card since there aren't spending caps.
I think the strong suit about this card is that you don't need 4 separate cards to get slightly better returns than you can with just this one card. Let's face it, the general public does not collect credit cards the way we do, so this is an amazing value.
I got my Costco card early on when I only had a QuickSilver, Discover card, and a no frills DCU card, so the value was great for gas, dining, and travel when Discover didn't have those categories. Not to mention that we have a Costco station that is far cheaper than any neighboring gas stations, so I get to save 4% on top of the already lower prices (they only take Visas, so I'm SOL with AMEX & Discover). Of course, now I have more cards that cover all of these categories, making the card less useful, but since I'm going to have a Costco membership anyway, I might as well keep it. There are times, though, that it makes more sense to use the Costco card, especially for purchase protection.
It's not for everyone, especially those with better cards, but it does hold it's own for those who prefer a small portfolio of cards.
For online Costco purchases, here is possibly the best ever deal:
- Executive member 2% + BOA Customized Cash Rewards
3.5%5.25% (assuming Plat honor, 2.5k/quarter cap) --> 7.25%.
For several online purchases, I think I will migrate partially from Amazon to Costco in this year. Hopefully their return policies would be similar to Amazon. In addition to this cashback, several "member only" prices look also much cheaper than other places.
Fico8: EX~EQ~TU~840 (12 month goal~850).
I like the selection a little more at Costco, though not by a lot. I like prices a little more at Sam's, though not by a lot. My car gets along better with the gas pumps at Sam's. I have to go slow or manually restart a lot at Costco. I think that's my car and not the pumps. Costco sells propane refills and charges for the actual propane used, which is nice. You might spend $8 to refill a tank. Lines are long at Costco but tend to move fast. Sam's often has no line, but it's largely self-checkout. I am not sure which I prefer, neither is that big a deal to me. If anybody doesn't like either of these stores, you really don't need to shop there. You can get the same stuff other ways (Walmart, Amazon). If I liked one and not the other, I'd get the card from the one I like. Since I like both, I got the card I like more, which was mostly determined by Citi vs Sync. I don't hate Sync, but I don't like the $10K soft cap. Both cards offer a ton of value if you are a member there anyway, but, I don't think either offers enough value to join just for the card. JMO.
@KJinNC wrote:I like the selection a little more at Costco, though not by a lot. I like prices a little more at Sam's, though not by a lot. My car gets along better with the gas pumps at Sam's. I have to go slow or manually restart a lot at Costco. I think that's my car and not the pumps. Costco sells propane refills and charges for the actual propane used, which is nice. You might spend $8 to refill a tank. Lines are long at Costco but tend to move fast. Sam's often has no line, but it's largely self-checkout. I am not sure which I prefer, neither is that big a deal to me. If anybody doesn't like either of these stores, you really don't need to shop there. You can get the same stuff other ways (Walmart, Amazon). If I liked one and not the other, I'd get the card from the one I like. Since I like both, I got the card I like more, which was mostly determined by Citi vs Sync. I don't hate Sync, but I don't like the $10K soft cap. Both cards offer a ton of value if you are a member there anyway, but, I don't think either offers enough value to join just for the card. JMO.
That is 100% correct. But as much as you should not join Costco and or Amazon (another example) just to get their cards it is also incorrect to view these membership fees as annual credit card fees. If I am an avid user of both Amazon and Costco and am already paying the yearly memberships dues anyway, their credit cards are only adding cashback and no additional expense versus for example the Amex Blue Cash Preferred card that may give me 6% cashback on groceries but I need to deduct the $95 annual fee (an expense I would not have otherwise) first before getting the cashback value or roughly 2k spent before cashback kicks in.
