Costco Credit Card – New Credit Card

Last year, Citi announced that they would become Costco’s new credit card provider, replacing American Express. This means that come June, American Express cards will no longer be able to be used at Costco, only cards on the Visa network.

Screen Shot 2016-03-27 at 10.35.18 AM.pngBecause of this, the American Express Costco card was discontinued, and customers should be receiving their new card in May.

What makes this new Citi card better than the American Express version is the earning structure of it! If you shop at Costco, this card could be a no brainer for you.  When this card is released later this year, it will earn the following cash back:

  • 4% cash back on gas, up to $7,000 per year
  • 3% cash back on restaurants and eligible travel
  • 2% cash back at Costco and Costco.com
  • 1% cash back on everything else

Again, if you shop at Costco, this card could be a no-brainer for you, as the cash back is awarded to you yearly (in February) as what I would consider a Costco gift card or gift certificate. Let’s assume the following spending per month:

  • $35 a month on gas
  • $200 a month on restaurants
  • $150 a month at Costco
  • $215 a month on everything else

That works out to:

  • 35 x 12 x .04 = $16.80
  • 200 x 12 x .03 = $72.00
  • 150 x 12 x .02 = $36.00
  • 215 x 12 x.01 = $25.80

In total, you’ve earned $150.60 in cash back over the course of a year, which is more than your hypothetical monthly trip to Costco! Free groceries, anyone?!

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Costco isn’t very convenient for me here in NYC (I don’t have a car, the space, or the time to make it feasible), but this card could be really beneficial for some people who find Costco convenient.

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