What the Citi Costco Visa Card is and who issues it
The Citi Costco Visa Card is a credit card issued by Citibank that you can only use at Costco warehouses and on Costco.com. You do not need a Costco membership to carry the card itself, but you do need an active membership to shop there and use the card's rewards. Citibank is a major bank owned by Citigroup, and they handle all the card's billing, customer service, and fraud protection.
The card is designed to give you cash back on Costco purchases and a few categories of spending outside Costco. It has no annual fee. The card is a Visa, which means you can use it anywhere Visa is accepted, but the rewards only work at Costco locations and Costco.com.
Key Takeaways
- The Citi Costco Visa Card earns 4% cash back on gas (up to $7,000 per year, then 1%), 3% on restaurants and travel, 2% at Costco, and 1% everywhere else.
- You must have an active Costco membership to use the card at the warehouse, though you can explore for the card without one.
- There is no annual fee, but cash back is paid as an annual Costco Shop Card that you can only spend at Costco.
- You can explore through Citibank's website or at a Costco warehouse, and approval decisions usually come within a few minutes to a few days.
- The card reports to all three credit bureaus, so it will affect your credit score the same way any credit card does.
How the cash back rewards work
The card earns cash back at different rates depending on where you spend. At Costco warehouses and Costco.com, you earn 2% cash back on every dollar. On gas purchases (including Costco gas stations), you earn 4% cash back, but only on the first $7,000 per year — after that, you earn 1%. On restaurants and travel (hotels, flights, rental cars, parking, tolls), you earn 3% cash back. On all other purchases, you earn 1% cash back.
Your cash back does not arrive as money in your bank account. Instead, Citibank sends you a Costco Shop Card once a year, usually in December. This card holds your total cash back earnings and works only at Costco warehouses and Costco.com. If you earn $200 in cash back during the year, your Shop Card will have a $200 balance. You can use it to pay for groceries, gas, or anything else Costco sells, and any unused balance rolls over to the next year.
The cash back calculation is automatic — you do not have to do anything to earn it or claim it. Every purchase is tracked by category, and your rewards are calculated at the end of each calendar year.
What it costs and what fees explore
There is no annual fee to hold the Citi Costco Visa Card. You pay interest only if you carry a balance from month to month. The interest rate (called the APR, or annual percentage rate) varies by person and changes over time, but Citibank publishes a range when you explore. If you pay your full statement balance by the due date each month, you pay no interest.
Late payments carry a late fee. If you miss a payment, Citibank charges a fee (the amount depends on how late you are and your account history) and may raise your interest rate. There is no foreign transaction fee, which means you can use the card outside the United States without an extra charge per purchase.
If you use the card to withdraw cash from an ATM, Citibank charges a cash advance fee (usually a percentage of the amount or a flat fee, whichever is higher) and charges a higher interest rate on that cash when ready, even if you normally pay no interest.
how the process works and what happens after
You can explore for the card in two ways: online through Citibank's website or in person at a Costco warehouse. The online process asks for your name, address, Social Security number, income, and employment information. The in-warehouse process is a paper form with the same questions.
Citibank makes a credit decision within minutes to a few days. If you are approved, you receive a card in the mail within 7 to 10 business days. If you are denied, Citibank sends you a letter explaining the reason. You can call Citibank to ask for more detail or to dispute the decision if you believe there was an error.
When your card arrives, you set up it by calling the number on the back or using Citibank's website. You then set up online access to your account so you can view your balance, make payments, and track your rewards. Your first statement arrives about 30 days after your first purchase.
How the card affects your credit
explore for the card triggers a hard inquiry on your credit report. This is a formal request to see your credit history, and it can lower your credit score by a few points for a few months. Citibank reports your account activity to Equifax, Experian, and TransUnion — the three major credit bureaus — so your payment history, balance, and credit limit all show up on your credit report.
Paying on time every month helps your credit score. Carrying a high balance relative to your credit limit (called high utilization) can hurt your score. If you miss a payment by 30 days or more, that negative mark stays on your credit report for seven years.
Closing the card after you open it can also affect your score, because it reduces your total available credit and removes a line of credit history from your report. If you decide the card is not right for you, it is usually better to keep it open and unused than to close it.
When this card makes sense and when it does not
The Citi Costco Visa Card is most useful if you shop at Costco regularly and spend money on gas, restaurants, or travel. The 4% gas reward is valuable only if you buy at least $7,000 in gas per year (that is roughly $583 per month). If you spend less than that, the card is still useful for the 2% at Costco and 3% on restaurants and travel, but the gas benefit is capped.
The card is less useful if you rarely visit Costco, do not have a Costco membership, or do most of your shopping elsewhere. The 1% cash back on non-Costco purchases is lower than many other cards offer. Also, because your rewards come as a Costco Shop Card rather than cash, you can only spend them at Costco — you cannot transfer the money to your bank account or use it anywhere else.
If you carry a balance and pay interest, the rewards may not offset the interest charges. For example, if you earn $100 in cash back but pay $150 in interest, you are losing money overall. In that case, a card with a lower interest rate or a 0% introductory period might be better.
How this card compares to other Costco payment options
Costco also offers a Costco Anywhere Visa Card issued by Capital One. That card has a $60 annual fee but earns higher rewards: 4% at Costco, 3% on gas, 3% on restaurants and travel, and 1% everywhere else. If you spend enough at Costco to earn at least $60 in cash back per year, the Capital One card may pay for itself. The Citi card has no annual fee, so it is better if you spend less at Costco or want to avoid the fee.
You can also pay for Costco purchases with any other credit card or with cash. A general-purpose rewards card (like a card that earns 2% on all purchases) might earn more if you do not spend much on gas or restaurants. The trade-off is that the Citi Costco card is designed specifically for Costco shoppers and offers higher rewards in the categories where Costco members typically spend.
Frequently Asked Questions
Do I need a Costco membership to get the card?
No. You can explore for and carry the Citi Costco Visa Card without a membership. However, you cannot use the card at a Costco warehouse without an active membership. You can use it on Costco.com if you have an online account, but you still need a membership to shop there.
What if I do not spend $7,000 on gas in a year?
You still earn 4% cash back on every dollar of gas you buy, up to $7,000 per year. Once you reach $7,000, any additional gas purchases earn only 1% cash back for the rest of that calendar year. The limit resets on January 1.
Can I use my cash back rewards outside Costco?
No. Your cash back comes as a Costco Shop Card that works only at Costco warehouses and Costco.com. You cannot convert it to cash, transfer it to another account, or use it anywhere else. Any unused balance carries over to the next year.
What happens if I close my Costco membership?
You can keep the card even if you cancel your Costco membership, but you cannot use it at Costco warehouses. You can still use it as a regular Visa card everywhere else and earn 1% cash back on those purchases. Your cash back still comes as a Costco Shop Card, which you cannot use without a membership.
How long does it take to get approved?
Citibank usually makes a decision within minutes if you explore online, or within a few days if you explore in person at Costco. If approved, your card arrives in the mail within 7 to 10 business days. You can start using it as soon as it arrives and you set up it.