A recent study showed the Costco Anywhere Visa® Card by Citi draws heavy interest from consumers online. It offers bonus cash back in some everyday spending categories, but a few alternative options provide a higher rate of return with fewer restrictions. Here’s what you should know.
Citi is a CreditCards.com advertising partner.A closely guarded secret within the credit card industry is how many cardholders have each card.
A clever way to approximate a card’s popularity is to examine search interest. Business Insider recently did that, and it found a runaway winner: the Costco Anywhere Visa® Card by Citi. That card reportedly received 935,000 monthly searches, more than five times as many as the second-place finisher (“Southwest credit cards”).
So here’s the question everyone and their mother seems to want to be answered: Is the Costco Anywhere Visa worth it?
See related: FAQs on Costco Anywhere Visa card by Citi
Technically, the Costco Anywhere Visa does not charge an annual fee, but you need a Costco membership to apply (and those start at $60 per year). The card gives 4% cash back on eligible gas purchases (up to $7,000 per year, then 1% after that). Cardholders earn 3% cash back at restaurants and on eligible travel, 2% at Costco and 1% on everything else.
Eligible gas is defined pretty broadly (although it does not include superstores, supermarkets, convenience stores, warehouse clubs other than Costco or fuel for anything other than an automobile).
Eligible travel is a bit more restrictive (trains, commuter travel, bed-and-breakfasts, timeshares and campgrounds do not earn 3% cash back). Still, that means airfare, hotels, car rentals, travel agencies, cruise lines and Costco Travel are included.
Another important bit of fine print: Costco Anywhere Visa cardholders only get their cash back once per year, as a certificate issued in a Costco store each February. It must be redeemed at Costco and expires on Dec. 31 of that year. You lose your rewards if you close your account before you receive your certificate.
Should I get it?
As with any credit card, the math depends on your particular spending habits. According to the Bureau of Labor Statistics’ most recent Survey of Consumer Expenditures, the average American household spends $3,506 annually on transportation (not including vehicle sales or gas), $3,154 on food away from home and $1,909 on gas.
I examined Costco’s 2019 fiscal year results and determined their average member spends $1,516 at Costco per year (net sales of $149.35 billion divided by 98.5 million members).
Combining these assumptions, the typical cardholder would earn approximately $306 in cash back per year on travel, restaurant, gas and Costco purchases. For simplicity’s sake, I didn’t include “other” spending which earns 1% cash back, because that’s highly variable (not just how much you spend, but also whether or not you pay with a card). I didn’t subtract the Costco membership fee, either.
Going through category by category, it’s easy to list cards that give higher rewards on each type of spending. Finding a single card that does all of this in one package is much harder, however. And it’s complicated by the fact that Costco only accepts Visa cards.
See related: Which credit card should I get?
The Susan G. Komen® Cash Rewards Visa® credit card* from Bank of America is an interesting contender. It’s basically the Bank of America® Cash Rewards credit card with a charitable twist.
Neither charges an annual fee and they have the same rewards structure: 3% cash back on a category of your choosing (either gas, dining, travel, online shopping, drugstores or home improvements and furnishings). You can change your pick every month if you want.
The cards also give 2% cash back on grocery store and wholesale club purchases. There’s a $2,500 quarterly spending limit on the 3% and 2% categories (combined). Cardholders earn 1% cash back on everything else.
Preferred Rewards members earn 25% to 75% more on their rewards. This means keeping $20,000 to $100,000-plus with Bank of America in deposits or investments. At the high end, the 3% cash back category could become a whopping 5.25% and the 2% category could become a very solid 3.5%.
Another possible alternative without an annual fee is the Wells Fargo Propel American Express® card*. Because it’s an Amex card, it’s not accepted at Costco, so that’s a potential stumbling block.
But it’s competitive in the other bonus categories, giving 3x points on dining and travel (including gas stations, flights, hotels and car rentals, plus subcategories that the Costco Anywhere Visa doesn’t count as travel, such as trains, timeshares and campgrounds).
All of these cards post rewards monthly, unlike the Costco Anywhere Visa, so you have a lot more opportunities to redeem them. And you don’t need to visit a physical location to get your hands on your cash back.
The Costco Anywhere Visa isn’t a bad card, but it is pretty restrictive, and the average Costco member would only earn about $30 in cash back per year on their Costco spending. The card offers more upside on gas, travel and dining, which is ironic for a co-branded card offered by a warehouse club. Those other categories are easier to optimize elsewhere.
*All information about the Susan G. Komen Cash Rewards Visa card and Wells Fargo Propel American Express card has been collected independently by CreditCards.com. The issuer did not provide the details, nor is it responsible for their accuracy.
The Bank of America content was last updated on March 3, 2020.