The Costco card makes sense if you shop there regularly and spend enough to recoup the annual fee, but the math depends on your habits

Costco offers two credit cards: the Costco Anywhere Visa (no membership required) and the Costco Visa (members only). Both charge an annual fee — $59 for the Anywhere card, $65 for the member card — and return cash back on purchases. Whether either card is worth it depends on how much you spend at Costco and how you use the card elsewhere. If you spend less than $3,000 a year at Costco, the rewards rarely cover the fee. If you spend more and pay the card off monthly, the math often works.

The real question is not whether Costco's rewards are generous — they are — but whether you would carry the card even without the Costco rewards. If you would not, the card only makes sense if Costco purchases alone generate enough cash back to pay the annual fee and then some.

Key Takeaways

  • The Costco Visa member card returns 2% cash back on Costco purchases and 1% everywhere else; the Anywhere card returns 1% everywhere and 2% at gas stations and restaurants.
  • You need to spend at least $3,000 per year at Costco to break even on the $65 annual fee if you only value the in-warehouse rewards.
  • Cash back from both cards posts as an annual certificate you redeem at the warehouse or online, not as a statement credit or direct deposit.
  • If you carry a balance on the card, interest charges will erase the value of the rewards within a few months.
  • The card is not required to shop at Costco; you can use any payment method, so the decision is purely about whether rewards outweigh the fee.

How the Costco Visa member card rewards work

The Costco Visa (for members) returns 2% cash back on Costco purchases, 1% on all other purchases, and an extra 1% at gas stations and restaurants (3% total at those merchants). The annual fee is $65. Cash back accrues throughout the year and posts as a certificate in your Costco account on your membership renewal date. You can redeem it at the warehouse, online, or as a statement credit if you call customer service.

To break even on the $65 fee using only Costco rewards, you need to spend $3,250 per year at Costco ($3,250 × 2% = $65). Anything above that is profit. If you also earn 1% on non-Costco purchases, the break-even point drops, but most people do not carry a card primarily for 1% cash back on groceries elsewhere.

How the Costco Anywhere Visa rewards work

The Costco Anywhere Visa charges a $59 annual fee and requires no membership. It returns 1% cash back on all purchases, 2% at gas stations and restaurants, and 2% at Costco warehouses and online. The cash back posts as an annual certificate on your card anniversary date.

The Anywhere card makes sense only if you shop at Costco regularly enough to hit the 2% tier there, because 1% cash back on general purchases does not cover the $59 fee. You would need $5,900 in non-Costco spending to earn $59 in rewards, which is impractical. If you shop at Costco, the math improves: $2,950 in Costco purchases at 2% equals $59, so the card breaks even on warehouse spending alone.

When the annual fee is worth paying

The card pencils out if you spend $250 or more per month at Costco. That is roughly $3,000 per year, which generates $60 in cash back on the member card. Add in gas, restaurants, and other purchases, and you clear the fee. For a household that shops at Costco weekly and fills up gas there, the card often pays for itself by mid-year.

The card is also worth it if you use Costco Travel, which offers discounted vacation packages and car rentals. Costco Travel purchases earn 2% cash back on the member card, and the savings on a single trip can exceed the annual fee. However, Costco Travel is only available to members, so this applies only to the member card.

When the annual fee is not worth paying

If you shop at Costco fewer than four times per year or spend less than $250 monthly, the rewards will not cover the fee. The same is true if you use Costco only for occasional bulk purchases and do most of your shopping elsewhere. In those cases, paying with a debit card or a different rewards card makes more sense.

The card is also a poor choice if you carry a balance. Credit card interest typically runs 18% to 25% annually, which means a $1,000 balance costs $150 to $250 per year in interest. That interest will wipe out years of rewards. Only use the Costco card if you pay the full balance every month.

How Costco cash back differs from other rewards cards

Most rewards cards post cash back as a statement credit or direct deposit that you can use immediately. Costco posts rewards as an annual certificate that expires one year after it is issued. You must redeem it at the warehouse, online, or by calling customer service. You cannot transfer it to another account or convert it to cash unless you call and request a statement credit, which some cardholders report takes extra time to process.

This structure means you cannot use Costco rewards to pay your credit card bill directly. You have to visit the warehouse or go online to redeem the certificate, then use that money for other purchases. If you forget to redeem before it expires, the money is gone. Other cards let you set rewards to post automatically, which is simpler.

Comparing the Costco card to other rewards options

A flat 2% cash back card (such as the Citi Double Cash or Capital One Quicksilver) returns the same rate on all purchases and posts rewards immediately. If you spend $3,000 per year at Costco and $12,000 elsewhere, a flat 2% card earns $300 total with no annual fee. The Costco member card earns $60 at Costco plus $120 elsewhere, totaling $180 — less than half. However, if you spend $10,000 at Costco and $5,000 elsewhere, the Costco card earns $200 plus $50, totaling $250, which beats the flat card.

The Costco card makes sense only if your Costco spending is high enough to justify the fee and the inconvenience of an annual certificate. If your spending is split evenly between Costco and other stores, a flat rewards card is usually better. If you spend most of your money at Costco, the Costco card wins.

Frequently Asked Questions

Do I have to be a Costco member to get the Costco credit card?

No. The Costco Anywhere Visa requires no membership and can be used anywhere Visa is accepted. The Costco Visa (member card) requires an active Costco membership, which costs $65 per year for Gold Star and $130 for Executive. The member card's rewards are higher, so most regular shoppers choose it.

What happens to my cash back if I don't redeem it before it expires?

The certificate expires one year after it is issued. If you do not redeem it by that date, Costco does not automatically refund it. You lose the money. Set a reminder on your phone for your card anniversary date so you remember to redeem before the deadline.

Can I use the Costco card outside of Costco?

Yes. Both cards work anywhere Visa is accepted. The Anywhere card earns 1% on general purchases and 2% at gas and restaurants. The member card earns 1% on non-Costco purchases and 3% at gas and restaurants. However, both cards are designed primarily for Costco shopping, so the rewards outside Costco are modest.

Does the Costco card have an annual percentage rate (APR)?

Yes. The APR varies based on your credit score and creditworthiness, typically ranging from 16% to 24%. If you carry a balance, interest will quickly erase any rewards you earn. Only use the card if you pay the full balance every month.

Can I get the Costco card if I have bad credit?

Costco does not publish a minimum credit score requirement, but the card is issued by Visa and Costco, which typically require good to excellent credit (usually 670 or higher). If your credit score is lower, you may be denied. You can apply and see what happens, but approval is not certain.