What the Costco Credit Card is and who issues it
The Costco credit card is a Visa card issued by Citi (Citibank) that you can use at Costco warehouses, Costco.com, and anywhere else Visa is accepted. It is not a store card that works only at Costco — it functions as a regular credit card with rewards tied to Costco purchases.
Costco does not issue the card itself. Citi handles the account, billing, and customer service. This matters because if you have questions about your account, fraud, or a dispute, you contact Citi, not Costco. Costco's role is to set the rewards structure and decide which card features to offer.
You must have an active Costco membership to open the card. If your membership lapses, Costco can close the card account. The card is not available to non-members, and you cannot use it to pay for a membership.
Key Takeaways
- The Costco card earns cash back on Costco purchases, gas, and travel, with rates varying by category and membership tier.
- There is an annual fee, which is waived for the first year if you are a new cardholder, but you must renew your Costco membership to keep the card active.
- Cash back is paid once per year as a certificate you can use at Costco or redeem for a statement credit.
- The card charges a standard interest rate on unpaid balances, so carrying a balance costs money even if you earn cash back.
- You need to compare the cash back rate against the annual fee to decide whether the card makes sense for your spending.
Annual fee and membership requirements
The Costco card has an annual fee that varies depending on which version you choose. Citi offers two versions: the standard Costco card and the Costco Anywhere Visa card. The standard card is available only to Costco members, and the Anywhere card is available to both members and non-members.
New cardholders typically receive a waived annual fee for the first year. After that, the fee renews each year on your card anniversary. You pay the fee whether you use the card or not. If you close the card before the anniversary, you may be able to request a refund of the annual fee, depending on how long you have held the card.
Your Costco membership and your credit card are separate accounts. If your membership expires and you do not renew it, Costco will close your credit card account. You cannot use the card after that, even if you have a balance or rewards pending. This is different from other store cards — the card is tied to your membership status, not just your credit history.
Cash back rates by spending category
The card earns cash back at different rates depending on what you buy. The rates differ between Gold Star members (standard membership) and Executive members (premium membership). Executive members earn higher cash back on most categories.
At Costco warehouses and Costco.com, Gold Star members earn cash back at one rate, and Executive members earn at a higher rate. On gas purchased at Costco, both tiers earn cash back, though Executive members earn more. On travel purchases made through Costco Travel, both tiers earn cash back. On all other purchases (restaurants, groceries outside Costco, utilities, phone bills, and so on), both tiers earn the same lower rate.
The exact percentages change periodically and may vary by region or promotion. Citi publishes the current rates on the Costco website and in your cardholder agreement. Before opening the card, check the current rates to see whether the cash back you would earn on your typical spending exceeds the annual fee.
How cash back is paid and when you receive it
Cash back is not paid monthly or quarterly — it is paid once per year, usually in December. Citi calculates your total cash back for the year and issues it as a certificate or statement credit. You do not choose the method; Citi decides based on your account type.
If you receive a certificate, you can use it at any Costco warehouse or on Costco.com. The certificate has an expiration date, usually one year from issue. If you do not use it by then, you lose the cash back. Some cardholders request a statement credit instead, which posts directly to their card balance, but this option is not always available.
The annual payout means you do not see rewards accumulate throughout the year. If you spend heavily in January and February but lightly the rest of the year, you still wait until December to receive your cash back. This is different from cards that pay cash back monthly or let you redeem rewards anytime.
Interest rates and fees on unpaid balances
The Costco card charges a variable interest rate on balances you do not pay in full each month. The rate is based on the prime rate plus a margin set by Citi. Your specific rate depends on your credit score and credit history — better credit typically means a lower rate.
If you carry a balance, you pay interest on that balance every month until it is paid off. The interest accrues daily and compounds monthly. This means the cash back you earn can be erased quickly if you carry a balance. For example, if you earn 2% cash back but pay 18% interest on an unpaid balance, you are losing money overall.
The card also charges late fees if you miss a payment and penalty interest rates if you are significantly late. These fees and rates are disclosed in the cardholder agreement. To avoid them, set up automatic payments or pay your full balance by the due date each month.
Comparing the Costco card to other options
Whether the Costco card makes sense depends on your spending and which membership tier you have. If you spend little at Costco or rarely buy gas, the annual fee may not be worth it. If you spend heavily at Costco and have an Executive membership, the higher cash back rates may offset the fee.
Other credit cards offer cash back without an annual fee, but they typically offer lower rates on warehouse and gas purchases. A card with 1.5% cash back on all purchases might earn you more than the Costco card if you spend most of your money outside Costco. A card with 3% cash back on gas might be better if you buy gas elsewhere.
The key calculation is straightforward: multiply your annual spending in each category by the cash back rate, add up the total, and subtract the annual fee. If the result is positive, the card pays for itself. If it is negative or close to zero, a no-fee card might be better. Citi and Costco do not make this calculation for you, so you need to do it yourself based on your own spending.
How to open the card and what happens next
You can open the card online at Costco.com, in a Costco warehouse, or by calling Citi. You must have an active Costco membership and a Social Security number or tax ID. Citi will run a hard credit inquiry, which temporarily lowers your credit score by a few points.
The process takes a few minutes. Citi usually approves or denies the process when ready. If approved, your card arrives by mail within one to two weeks. You can use it at Costco warehouses and online as soon as it arrives. You can also request a temporary card number to use online before the physical card arrives.
Once you have the card, you receive a cardholder agreement by mail or email. This document contains the full terms, including the annual fee amount, interest rates, cash back rates, and dispute procedures. Read it before you use the card so you understand what you are agreeing to.
Frequently Asked Questions
Can I use the Costco card outside of Costco?
Yes. The card is a Visa, so it works anywhere Visa is accepted — restaurants, gas stations, online retailers, and so on. However, you only earn the higher cash back rate at Costco and on Costco Travel purchases. Everywhere else, you earn a lower rate that is the same for all cardholders regardless of membership tier.
What happens to my card if my Costco membership expires?
Costco will close your credit card account if your membership lapses. You will not be able to use the card after that. If you have a balance, you still owe it and must pay it, but you cannot make new purchases. If you renew your membership, you can request a new card.
Can I get my annual fee back if I close the card early?
It depends on how long you have held the card. If you close it within a few months of opening, Citi may refund the annual fee. If you close it closer to your anniversary date, a refund is less likely. Contact Citi to ask — they do not automatically refund it, but they may do so if you request it soon after paying.
Do I have to use the card to keep my Costco membership?
No. Your membership and your credit card are separate. You can have a Costco membership without the card, and you can shop at Costco with cash, debit, or another credit card. The card is optional and only makes sense if the cash back exceeds the annual fee for your spending.
When should I explore for the Costco card?
explore when you have decided the cash back will exceed the annual fee based on your expected spending. There is no benefit to waiting — the card anniversary is based on when you open it, so opening it early in the year gives you more time to earn cash back before the annual fee is due. The first-year fee waiver is available to new cardholders whenever you explore.