The Costco Credit Card Makes Sense If You Shop There Regularly and Spend Enough to Offset the Annual Fee

The Costco Anywhere Visa Card costs $65 a year ($130 for the Executive version) and returns cash back on purchases — 2% at Costco, 1% everywhere else, and higher percentages on gas and travel. Whether it pays for itself depends on how much you spend and where. If you shop at Costco weekly and spend $3,000 or more there annually, the card usually returns enough cash to cover the annual fee. If you shop there once a month or less, it probably does not.

The card is issued by Visa and Citi, not Costco itself, so you can use it anywhere Visa is accepted. You do not need a Costco membership to open the card, but you do need one to shop at Costco and redeem your rewards. The cash back posts to your Costco account as an annual certificate you can spend in-warehouse or online.

Key Takeaways

  • The card costs $65 per year and returns 2% cash back at Costco and 1% everywhere else, so you need to spend roughly $3,250 at Costco annually just to break even on the fee.
  • Cash back rewards post once per year as a Costco certificate, not monthly, so you cannot use them when ready after a purchase.
  • You must have a Costco membership to shop there and redeem rewards, which adds another $60 to $130 per year depending on membership tier.
  • The card offers no introductory bonus, no rotating categories, and no sign-up rewards, so the value comes entirely from ongoing cash back on regular spending.
  • If you rarely shop at Costco or prefer a card with monthly rewards posting, a standard cash back card with no annual fee may save you money.

How the Cash Back and Annual Fee Actually Work

The card returns 2% cash back on all Costco purchases (in-warehouse and online), 1% on everything else, 3% on gas stations, and 3% on travel. These percentages are fixed — there are no bonus categories that rotate or change. The cash back does not post monthly or let you redeem it whenever you want. Instead, Citi calculates your total rewards once per year and issues a Costco certificate for the full amount, usually in December.

The annual fee of $65 (or $130 for the Executive card, which adds 2% back on Costco purchases instead of 1% everywhere else) posts to your account every year on your card anniversary. You pay it whether you use the card or not. If you close the card before the anniversary, you do not get a refund. If you keep the card open but do not use it, you still owe the fee.

To break even on a standard $65 card, you need roughly $3,250 in Costco purchases per year (2% of $3,250 = $65). That works out to about $62 per week. If you spend less than that at Costco, the card costs you money. If you spend more, the rewards exceed the fee.

When the Executive Card Makes Financial Sense

The Executive version costs $130 per year and returns 2% cash back at Costco instead of 1% everywhere else. It also includes a $110 annual Costco Shop Card (a certificate you can use on anything in the warehouse), which effectively reduces the net cost to $20 per year. However, you only receive that certificate if you spend at least $3,000 at Costco in the first year.

The Executive card breaks even around $6,500 in Costco spending annually (2% of $6,500 = $130). If you spend less than that, the standard card is cheaper. If you spend more, the Executive card returns more cash back. The $110 certificate sweetens the deal only if you actually use it — if you let it expire, you lose that value.

Comparing the Costco Card to Other Cash Back Options

Most no-annual-fee cash back cards return 1.5% to 2% on all purchases. The Citi Double Cash and Fidelity Rewards Visa both return 2% cash back with no annual fee, though they post rewards monthly rather than once per year. If you spend $3,250 or more at Costco annually, the Costco card's 2% rate there plus the 1% rate elsewhere may beat a flat 1.5% card. But if you spend less at Costco or prefer monthly rewards, a no-fee card often wins.

Cards with rotating categories (like the Chase Freedom Flex) can return 5% on certain purchases, but only up to a quarterly cap. Those cards have no annual fee and post rewards monthly. They work well if you can time your spending to bonus categories, but they require more tracking than a flat-rate card.

The Costco card has no sign-up bonus, no introductory rate, and no special perks beyond cash back. If you value travel protections, purchase protection, or extended warranties, other cards may offer more. The Costco card is purely a rewards card for people who shop at Costco frequently.

The Membership Fee You Cannot Forget

The Costco credit card requires a Costco membership to use. A Gold Star membership (the basic tier) costs $65 per year. The Executive membership costs $130 per year and includes a 2% annual reward on Costco purchases. So your total annual cost is at least $65 (card) + $65 (membership) = $130 before you earn a single dollar in rewards.

This is the biggest hidden cost people overlook. The card fee alone does not tell you whether the card pays for itself. You have to factor in the membership fee too. If you do not already have a Costco membership, the card only makes sense if your total spending at Costco and on the card elsewhere is high enough to cover both fees.

How to Decide If the Card Is Right for You

Start by tracking your Costco spending for three months. Multiply that by four to estimate your annual total. If you spend $3,250 or more per year at Costco, the standard card likely pays for itself. If you spend $6,500 or more, the Executive card may be worth the extra cost. If you spend less than $3,250, a no-fee cash back card will save you money.

Next, consider where else you spend money. The card returns only 1% outside Costco, which is lower than many no-fee cards. If you do most of your spending outside Costco (groceries, gas, restaurants, online shopping), a flat 1.5% or 2% card with no annual fee will likely return more total cash back.

Finally, think about how you use rewards. If you prefer to redeem cash back monthly or transfer it to a bank account, the Costco card's annual certificate may feel restrictive. If you shop at Costco anyway and are comfortable spending the certificate there once per year, the card fits your workflow.

Frequently Asked Questions

Do I need a Costco membership to get the card?

No, you can open the card without a membership. But you cannot shop at Costco or redeem your cash back rewards without one. So if you do not have a membership, the card only makes sense if you plan to get one.

Can I use the card outside Costco?

Yes, you can use it anywhere Visa is accepted. You earn 1% cash back on non-Costco purchases, 3% on gas and travel. But the card's main value comes from the 2% rate at Costco, so it is most useful if Costco is where you spend the most.

What happens to my rewards if I close the card?

Your cash back certificate is issued once per year in December. If you close the card before then, you forfeit any rewards you have not yet received. If you close it after the certificate posts, you keep the certificate and can spend it at Costco.

Is there a sign-up bonus?

No, the Costco card has no introductory bonus or rewards for opening it. The value comes entirely from ongoing cash back on purchases, so it is best for people who already shop at Costco regularly.

Can I use the card to pay my Costco membership fee?

Yes, and you will earn 2% cash back on the membership fee itself. But the membership fee is usually $65 or $130, so the cash back on it alone ($1.30 to $2.60) is small compared to the total cost of both the card and membership.