The Costco Anywhere Visa offers generous rewards at the bulk retailer and beyond, but there are a few caveats to consider

Holly Johnson

Jan 4, 2020, 00:01 IST

The Costco Anywhere Visa offers generous rewards at the bulk retailer and beyond, but there are a few caveats to consider

ROBYN BECK/Contributor/Getty Images

The Costco Anywhere Visa® Card by Citi lets you earn 4% back on up to $7,000 spent at gas stations each year (then 1%), 3% back on dining and eligible travel purchases, 2% back on Costco and Costco.com purchases, and 1% back on everything else.
While the ongoing rewards you earn with this card can be downright lucrative, the fact that there's no sign-up bonus is a major downside. Another potential "gotcha" of this card is that you can only cash in your rewards once per year.
Make sure to consider other cash-back credit cards like the Chase Freedom and the Blue Cash Preferred® Card from American Express to see which ones will help you earn the most rewards on all your spending.
See Business Insider's list of the best cash-back credit cards »

The Costco Anywhere Visa Card by Citi offers generous rewards in several different spending categories, but that doesn't mean it's the best card for Costco purchases. The reality is that there are several different cards that may let you earn more rewards over time depending on where you spend the most.

At the end of the day, the Costco Anywhere Visa really stands out in terms of the rewards it offers on gas purchases worldwide. If you're someone who drives long distances or commutes to work, this card could be an excellent choice for your wallet for that reason alone thanks to its bonus for gas purchases.

Before you sign up, it helps to know and understand exactly how this card works and how it stacks up to comparable rewards credit cards. Keep reading to find out these important details and more.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

Costco Anywhere Visa card details

Annual fee: None, but a Costco membership is required

Cash-back rates: Earn 4% back on up to $7,000 spent on eligible gas purchases worldwide each year, including at Costco gas stations (then 1%), 3% back on dining and eligible travel purchases, 2% back on Costco purchases as well as purchases made at Costco.com, and 1% back on other purchases

Earning cash back with the Costco Anywhere Visa

I love this card gives you 4% back on up to $7,000 in gas station spending each year. If you drive enough to max this category out each year, you'll earn $280 in rewards in this category alone.

Obviously, racking up 3% back on dining and eligible travel purchases could also help you earn rewards quickly, and you'll earn even more cash back if you do most of your grocery and household shopping at Costco to begin with. That's because you earn 2% back on Costco purchases made with this card, and that's on top of the 1% back you'll earn on regular purchases.

An important caveat for redeeming your cash back

The biggest downside of the Costco Anywhere Visa card is that you don't receive your rewards in the form of a check or statement credits. Not only that, but you also can't cash them in throughout the year.

According to the terms and conditions on this credit card, "cash back will be provided as an annual credit card reward certificate once your February billing statement closes, and is redeemable for cash or merchandise at US Costco Warehouses."

In other words, your rewards are good for more Costco purchases or cash back - but you have to visit a Costco location in order to redeem rewards for cash back instead of merchandise. And you'll only receive your rewards once per year, and during the middle of winter at that. This makes the Costco Anywhere Visa unlike most other cash-back cards, which let you redeem your rewards any time you want.

Cardholder benefits

The Costco Anywhere Visa card does offer a few notable benefits that can help consumers save money and protect their purchases.

You'll get purchase protection against damage or theft, for example, provided you report the incident within 120 days of purchase (90 days for New York residents). You'll also receive extended warranties on qualifying products that already come with a manufacturer's warranty.

Costco Visa card costs and fees

In addition to being free of annual fees, the Costco Anywhere Visa card doesn't charge any foreign transaction fees. However, you should note that you do have to belong to Costco in order to qualify for this credit card. Costco memberships start at $60, which is worth considering if you don't have a membership already and don't plan on shopping at the store very often.

In terms of additional costs, this card comes with a variable APR of 16.74% on purchases. You'll also pay a 3% fee (minimum $5) for balance transfers and a 5% fee (minimum $10) for cash advances. A $39 fee for late payments and returned payments also applies.

How the Costco Visa Card compares to other rewards credit cards

If you're not dead set on signing up for the Costco Anywhere Visa, seeing how a few other rewards credit cards stack up makes a lot of sense.

There are many credit cards that offer exceptional rewards on Costco purchases as well as everything else you buy. Many other cash-back credit cards also offer intro bonuses that can help you get a head start on your earnings for the year.

The Chase Freedom is a smart option if you want to earn 5% back on up to $1,5000 spent in rotating bonus categories each quarter when you activate which typically include bulk retailers like Costco and Sam's Club for three months of the year. It earns 1% back on all other purchases. The card has no annual fee, and if you also have a Chase card that earns Ultimate Rewards points, the rewards you earn with the Freedom can be redeemed for travel. (You also have the option to redeem rewards for statement credits, gift cards, and merchandise, but redeeming for travel usually gets you the most value.)

You should also consider the Bank of America® Cash Rewards credit card, which lets you earn 3% in a category of your choosing plus 2% back at grocery stores and wholesale clubs. With this card, you could earn 3% back on online purchases made at Costco.com then 2% back at Costco brick and mortar stores. Just remember that a $2,500 cap per quarter applies to bonus categories with this card - you'll earn 1% back after you reach it. There's no annual fee, and you can redeem rewards for a check, direct deposit into a bank account, or deposits into select Bank of America accounts

The Blue Cash Preferred® Card from American Express is a final option to consider if you shop at regular grocery stores more than wholesale clubs. This card gives you 6% back on up to $6,000 in US supermarket spending each year (then 1% back), plus 6% back on select US streaming services. You also earn 3% back at US gas stations and on transit and 1% back on other purchases, and that's on top of the lucrative welcome bonus: $250 back when after you spend $1,000 in the first three months. That makes this card hard to beat among credit cards that offer bonus rewards in popular spending categories.

Just note that the Blue Cash Preferred has a $95 annual fee. You can redeem rewards for statement credits to your account, with no limitation on how often you can redeem your cash back.

The bottom line

Should you sign up for the Costco Anywhere Visa? If you're a Costco member already and you spend a lot of money on gas, it's a great option. Just remember that your rewards will only become available to you once per year, and that you'll have to visit a brick-and-mortar Costco store to get your cash back or to cash in your rewards for merchandise.

If you want more flexibility, on the other hand, other cash-back credit cards let you redeem your rewards for statement credits, a check in the mail, and plenty of other options all year long. Make sure to compare the additional cards on this list as well as other cash-back and rewards credit cards before you make a final decision.

Click here to learn more about the Costco Anywhere Visa card »

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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.