Costco & Citi have officially announced the details of their Costco Anywhere Visa card and the rewards on the card are much better than what was originally expected. The card is not available for new sign ups yet, but will be available for new sign ups on June 20th, 2016. Let’s take a look at both the personal and business version of this new card.
Card Review
Both the personal and business cards will come with the same rewards program, benefits & fees. They are as follows:
- No annual fee (but Costco membership is required)
- No foreign transaction fee (after January 25, 2018)
- Card earns at the following rates:
- 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter
- 3% cash back on restaurant and eligible travel purchases worldwide
- 2% cash back on all other purchases from Costco and Costco.com
- 1% cash back on all other purchases
Cash back with Costco is a bit different than normal. Normally you accumulate cash back and can redeem whenever (assuming you meet any minimum cash back requirements), instead with Costco you receive an annual cash back coupon every year in February.
Existing Cardholders
The Costco portfolio is currently managed by American Express, if you currently have an American Express Costco card the following will happen:
- Sometime in May you’ll receive your new Citi card
- Continue to use your American Express card until June 19th
- On June 20th you can begin using the new Citi Costco card you received in May
- Cash back you’ve earned on your American Express card will be rolled over to your new Citi card and you’ll receive it as part of your annual cash back coupon that you’ll receive in February of 2017.
Our Verdict
This card is significantly better than the card offered by American Express, which had the following rewards:
- 3% (4% on the business card) on the first $4,000 ($7,000 on the buisness card) of gas, 1% thereafter (includes Costco gas stations but excludes superstores, supermarkets, convenience stores, and warehouse club)
- 2% on travel and at US restaurants
- 1% on all other purchases including Costco
Basically the new card will offer an additional 1% in all of the bonus categories. It was going to be absurd if it was possible to earn 2% back at Costco by using the Fidelity Visa 2% cash back card on all purchases and only 1% by using the official card.
It is possible to earn 5% cash back on gas purchases, but not at Costco stations. 3% cash back on restaurant purchases is best in show for cash back, but depending on how you value points you might get better value out of another card. As mentioned early, this is a significant improvement over the American Express card. It’s really difficult to know if signing up for the card will make sense though – as we don’t know whether a sign up bonus will be offered and if it is offered what it’ll be. I guess we’ll find out more when June 20th comes around.
