Primary and ‘household’ account holders should accumulate rewards when using card
Dear Cashing In,
My wife and I have been long-time shoppers at Costco and have had the Executive Card for several years. I received my Costco reward gift certificate today, and my reward check seemed smaller than it should have been. I went to read the fine print and was surprised that only purchases made by the primary cardholder are eligible for the 2 percent rewards program! I make the bulk of purchases for the family – my wife and I have a joint account, but you guessed it – she is the primary cardholder. In our situation, we have lost out on cash rewards for thousands of dollars of purchases at Costco and Costco gas because we used my card instead of hers. Isn’t it unusual for both cards not to earn rewards? – James
The main benefit to becoming a Costco Executive member is the 2 percent back that you earn on purchases. You’re paying for that privilege, as an Executive membership costs $110, twice as much as a regular membership.
So to learn that a lot of your household’s Costco purchases don’t qualify for the cash-back rewards is annoying, to say the least.
Costco says in its membership materials that “only purchases made by the primary and active primary Household Cardholder on the account will apply toward the Reward.” That language is a little confusing, as it suggests that not all cards affiliated with the account earn rewards.
I checked with Costco, whose PR person told me that a “household cardholder” is anybody living in the same house as the person with the account. That means that both the primary account holder and a second person tied to that account who lives at the same address should be eligible for the additional 2 percent back. The extra reward applies only to one household, and to a maximum of two cards.*
If the Executive Member is a business member and has “add-on” members (usually employees), the purchases of add-on members would not apply to the reward, the Costco representative told me.
You should check with Costco, because it sounds as though both your purchases and those of your wife should be eligible for the 2 percent back.
Keep in mind that Costco cards are different from credit cards. Costco cards are merely membership cards that allow you to shop at Costco.
Credit cards are similar, in the sense that most allow you to apply for an additional card linked to the primary account. The person with that additional card is known as an “authorized user.” Adding an authorized user can help that person establish credit, but you have to be careful, because the main account holder is responsible for all the charges.
When it comes to rewards, though, the account holder generally earns the rewards on charges from the authorized user’s card. If you look through the terms and conditions on major credit card reward programs, they tend to say that authorized user’s cards are eligible for rewards.
That’s certainly true with most Chase cards, American Express cards and Citi cards. Citi even tells prospective applicants that they can add authorized users “at no additional cost and earn points faster.” Sometimes, just the act of adding an authorized user to a credit card account can earn you extra points.
Even the Citi Costco Anywhere Visa says in its terms and conditions that charges by authorized users count toward the accumulation of cash rewards.
Since credit cards typically allow authorized users’ spending to earn rewards, it’s natural that you would think Costco’s membership program would work the same way. I hope you are able to figure this out with Costco and receive the rewards you deserve.
*Correction: As originally published, the answer to who qualifies for Costco 2 percent Executive rewards points was incorrect. See CreditCards.com’s corrections policy.