If you’re looking for a new credit card, it’s easy to become overwhelmed by choice. There are hundreds of options to choose from, spread across more than a dozen issuers (not including store cards). To put it simply, narrowing down the list of those that work best for you is a challenge. But, Costco shoppers may have an easier time making a decision. The Costco Visa could offer the right kind of perks based on your shopping preferences. If you’re a Costco member looking for a credit card, here’s what you need to know about the Costco Visa.
The Costco Visa Issuer
First, the Costco Visa is technically called the Costco Anywhere Visa. It is issued by Citi, one of the largest issuers in the country. It’s one of many cards issued by the company but is the only option on the market that specifically targets Costco members.
It is important to note that Citi actually offers two Costco Visa cards. One is aimed at consumers, while the other is specifically for businesses.
Visa Requirements From Costco
If you want a Costco Visa, you do have to meet the requirements. First, you have to be approved for the card. This includes passing a credit check and having sufficient income to repay any balance you create.
Additionally, you have to be a Costco member. Plus, you need to maintain your Costco members. Otherwise, you may have to pay additional annual fees to keep your card, and won’t have access to many of the card’s benefits.
Costco Visa Cash Back Program
The biggest benefit Costco Visa users get is access to a generous cashback program. When you use the card, you can earn 4 percent cash back on eligible gas purchases up to $7,000 a year, including at the buying gas at the Costco station. Once you hit that $7,000 threshold, the gas cashback doesn’t disappear. Instead, it’s reduced to 1 percent.
But Costco Visa users don’t just get money back on gas. Eligible restaurant and travel purchases earn 3 percent cash back. You get 2 percent for shopping at Costco and Costco.com. Finally, all other purchases earn 1 percent.
Overall, you can earn cash back on anything you buy. That can be incredibly beneficial and makes this rewards program incredibly competitive.
Redeeming the rewards is also incredibly straightforward. Once a year, you’ll receive a rewards certificate. You can redeem that for cash or use it to purchase merchandise from Costco. The process happens automatically, so you don’t have to worry about forgetting about your cashback.
Other Costco Anywhere Visa Benefits
While the cashback program is the superstar, cardholders also get access to other benefits. For example, there are no foreign transaction fees. That makes using your card anywhere you travel an option, and you won’t have to worry about extra costs.
You also get access to the Citi Damage and Theft Purchase Protection program. If an item you buy is damaged or stolen within 120 days (90 days for residents of New York) of purchase, you might be eligible for free repairs or a full refund.
As for Costco-specific benefits, there is one thing that can help members. If you forget your Costco membership card, you can flash your Costco Visa instead to enter and pay at the store.
Finally, when you buy with this Citi card, you get automatic extended warranties. The amount of time can vary, but it does give you some extra protection.
Costco Visa Interest Rate and Fees
By and large, the Costco Visa interest rate is competitive. The average cashback card comes in at 20.90 percent.
With the Costco Visa, you can get an interest rate below that average. It comes with a variable 15.24 percent interest rate, which applies to purchases and balance transfers. Cash advances do come with higher interest, landing at 25.25 percent. Finally, if you have a late payment or your payment is returned, it can trigger the 29.99 percent penalty interest rate.
There are some fees you may need to contend with as well. Cash advances come with a $10 or 5 percent of the amount (whichever is higher) fee. If you initiate a balance transfer, you’ll pay the greater of $5 or 3 percent of the transferred amount.
Is this Visa Card Right for You?
If you are a Costco member, then there is a chance this is a decent card for you. The interest rate and fees are competitive, and you can legitimately use this card anywhere that accepts Visa.
However, if you are going to take full advantage of the cashback program, then there are other points to consider. Often, those who buy a lot of gas, dine out frequently, or spend a substantial amount of time traveling will access the most generous rewards. In many cases, those purchases will earn 3 to 4 percent cash back, which is fairly high.
The cashback from shopping at Costco isn’t as impressive. There are many other cards that offer 2 percent for all purchases (which could apply to Costco), and some offer better rates on commonly used categories, like grocery stores.
Ultimately, you need to consider your habits to determine whether the Costco Visa is right for you. If you spend a lot on fuel, travel, and dining out, and are also a loyal Costco shopper, the Costco Anywhere Visa by Citi is worth considering. But, if your spending mostly focuses on other categories, it could be smart to compare your options to make sure you choose the card that gives you the most benefit.
Do you have a Costco Visa? What has your experience been like? Share your thoughts in the comments below.
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