The Costco credit card makes sense if you shop at Costco regularly and spend enough to recoup the annual fee through cash back
The Costco Anywhere Visa Card by American Express costs $65 per year ($130 for the household version that adds an authorized user). It returns 2% cash back on Costco purchases, 1% on everything else, and 3% on gas and travel. Whether it pays for itself depends on how much you spend at Costco and how you compare it to cards you already own.
The math is straightforward: you need to earn at least $65 in cash back annually to break even. At 2% back on Costco purchases, that means spending $3,250 per year at Costco — about $270 per month. If you spend more than that, the card begins to add value. If you spend less, you are paying for a card that does not return its own cost.
The card also requires a Costco membership ($65 for Gold Star, $130 for Executive). That is a separate decision from the credit card itself, though many people bundle them together mentally. You can shop at Costco with a debit card or another credit card if you have a membership; the Costco Visa is optional.
Key Takeaways
- The card costs $65 annually and returns 2% on Costco purchases, so you need to spend at least $3,250 per year at Costco to break even on the fee alone.
- The 3% cash back on gas and travel can add value if you use those categories, but only if you are not already earning more from another card in those categories.
- You must have a Costco membership to use the card, and that membership fee is separate from the credit card fee.
- If you spend less than $3,250 annually at Costco, a no-annual-fee card with 1.5% to 2% cash back on all purchases will likely save you money.
- The card offers no sign-up bonus, unlike most other premium cash back cards, so there is no initial incentive to offset the annual fee.
When the 2% Costco cash back actually adds up
The 2% return on Costco purchases is the card's main draw. Costco shoppers tend to buy in bulk — groceries, household goods, electronics — so the percentage compounds quickly. A household that spends $500 per month at Costco ($6,000 per year) earns $120 in cash back, which covers the $65 fee and leaves $55 in net value.
The card works only at Costco warehouses and Costco.com. It does not return 2% at other grocery stores, gas stations, or retailers. If you are comparing it to a card that returns 2% everywhere, the Costco card only wins if the bulk of your spending happens inside Costco. Many households do concentrate their grocery and household spending there, which is why the card appeals to regular members.
One practical detail: Costco cash back posts as an annual reward certificate, not monthly or quarterly statements. You receive it once per year, usually in December, and it expires after one year. That means you cannot use it when ready to offset the next year's membership fee — you have to spend it or lose it.
The 3% gas and travel categories have limits
The card returns 3% on gas (up to $110 per year, then 1%) and 3% on travel booked through Costco Travel. The gas category sounds generous until you hit the cap. At 3% back, you would need to spend $3,667 on gas to hit the $110 limit — roughly 1,200 gallons at $3 per gallon. Many households do not spend that much on gas in a year, especially if they drive less or have fuel-efficient vehicles.
The travel category applies only to bookings made through Costco Travel, not to flights or hotels booked directly or through other travel sites. Costco Travel offers package deals and group rates, but the prices are not always lower than booking independently. The 3% cash back is a bonus if you book through them anyway, not a reason to book through them if you would pay more.
If you already own a card that returns 2% or more on gas and travel, the Costco card's 3% in those categories may not move the needle. Compare your current card's rewards in those categories to what the Costco card offers before deciding the extra percentage matters.
How the Costco card compares to other cash back options
The main competitor is the Citi Double Cash Card, which has no annual fee and returns 1% when you buy and 1% when you pay the bill (2% total on everything). If you spend $3,250 per year at Costco and nothing elsewhere, the Costco card's 2% beats the Double Cash's 2% by a tiny margin — but only at Costco. Outside Costco, the Double Cash ties it.
Another option is the Capital One SavorOne Card, which has no annual fee and returns 3% on dining, entertainment, and streaming, plus 1% on everything else. If your spending is weighted toward those categories, SavorOne may return more overall value than the Costco card, especially since you avoid the $65 annual fee.
The American Express Blue Cash Preferred costs $95 per year and returns 3% on groceries (up to $150 per year, then 1%), 3% on transit, and 1% on everything else. It has a higher annual fee than the Costco card, but if you buy groceries outside Costco as well, the higher grocery category might offset the extra cost. The math depends on your specific spending pattern.
None of these cards offer a sign-up bonus. The Costco card stands out for that reason — you get no initial incentive to offset the annual fee, unlike most premium cash back cards that offer $100 to $200 in bonus cash back in the first three months.
The card's other features and restrictions
The Costco Visa offers extended warranty protection, purchase protection, and travel accident insurance — benefits that come with most American Express cards. These are useful if you buy electronics or travel frequently, but they are not unique to the Costco card and should not be a deciding factor.
The card has no foreign transaction fees, which matters if you travel internationally. Many no-annual-fee cards also offer this, so again, it is a feature that matches competitors rather than beats them.
One restriction: you can only use the card at Costco and Costco.com. You cannot use it at other retailers, even though it is a Visa. This is by design — Costco negotiated an exclusive arrangement with American Express, which is why the Costco card is the only credit card accepted at Costco warehouses (though debit cards and cash work too). If you want a card that works everywhere, this is not it.
The household card option and whether it makes sense
The household version costs $130 per year and adds one authorized user to your account. Both cardholders earn cash back on their purchases, and the rewards combine into a single annual certificate. The household card makes sense if two people in your household shop at Costco regularly and would otherwise each need their own card.
If only one person shops at Costco, the household card wastes $65. If two people shop but one spends very little, you are paying $65 extra to add someone who may not earn enough cash back to justify their share of the fee. Calculate the combined annual Costco spending of both cardholders before upgrading to the household version.
When to skip the Costco card and use something else
If you spend less than $3,250 per year at Costco, the card does not pay for itself. A no-annual-fee card with 1.5% to 2% cash back on all purchases will save you money over time. Examples include the Citi Double Cash (2% everywhere), the Capital One SavorOne (3% on dining and entertainment, 1% elsewhere), or the Chase Freedom Unlimited (1.5% everywhere).
If you shop at Costco but also spend heavily at other grocers, gas stations, or restaurants, a card with higher rewards in those categories may return more total cash back. The Costco card only rewards Costco purchases at 2%; everything else earns 1%. A card that returns 2% or more on groceries, gas, and dining everywhere might beat it.
If you do not have a Costco membership, the credit card is irrelevant. The membership is the prerequisite, and that is a separate $65 to $130 decision based on whether Costco's selection and prices work for your household.
Frequently Asked Questions
Can I use the Costco credit card outside of Costco?
No. The card only works at Costco warehouses and Costco.com. You cannot use it at other retailers, even though it is a Visa. If you need a card for everyday spending outside Costco, you will need a separate card.
Do I have to have a Costco membership to get the card?
Yes. You must be a Costco member to open the card, and membership is a separate annual fee ($65 for Gold Star, $130 for Executive). The credit card fee and membership fee are not the same thing.
What happens to my cash back rewards if I do not spend them?
Cash back posts as an annual reward certificate that expires one year after you receive it. If you do not use it within that year, you lose it. Most people receive their certificate in December and have until the following December to spend it at Costco.
Is the 3% gas cash back worth it if I do not drive much?
Probably not. The 3% gas category caps at $110 per year, which requires spending about $3,667 on gas. If you spend less than that, the extra percentage does not matter. For most households, the 2% Costco cash back is the main value, not the gas category.
Should I get the household card if my spouse rarely shops at Costco?
Only if your spouse's Costco spending is high enough to earn at least $65 per year in cash back at 2%. If they spend less than $3,250 annually at Costco, the household card costs more than it returns. Stick with the individual card in that case.