The Costco credit card saves money for people who shop at Costco regularly, but only if the annual fee and spending pattern work in your favour

Costco offers two credit cards through Citi: the Costco Anywhere Visa Card (no annual fee) and the Costco Visa Card (annual fee required). Which one makes sense depends on how much you spend at Costco, what you buy, and whether you use the card outside Costco. The card that looks good on paper can cost you money if your actual shopping doesn't match the rewards structure.

The core question is simple: will the cash back you earn exceed what you pay in fees and what you give up by not using a different card? That requires knowing your own numbers, not just the advertised rewards rates.

Key Takeaways

  • The Costco Visa Card costs $65 per year and returns 2% cash back at Costco and 1% elsewhere; the Anywhere card is free but returns only 1% at Costco and 0.5% elsewhere.
  • You need to spend at least $6,500 per year at Costco for the paid card's rewards to cover its annual fee, and more if you also factor in rewards you'd earn on non-Costco purchases with a different card.
  • Costco membership is separate from the credit card and costs $60 to $130 per year depending on tier; you can shop there with any payment method, so the card is optional.
  • The paid Costco card's 2% return at Costco is competitive with other cards' rewards, but only if you don't already have a card offering similar or better rates on groceries and gas.
  • Both Costco cards require you to be a Costco member, and the card issuer (Citi) sets approval and credit limit decisions independently of Costco.

How the two Costco cards compare

The Costco Visa Card (the paid version) charges $65 annually and returns 2% cash back on Costco purchases, 1% at gas stations (up to $7,000 per year, then 0.5%), and 1% on all other purchases. The Costco Anywhere Visa Card has no annual fee and returns 1% at Costco, 1% at gas stations, and 0.5% everywhere else.

The paid card's advantage is the 2% return at Costco. The free card's advantage is that you pay nothing to hold it. The break-even point is roughly $6,500 in annual Costco spending — at that level, the extra 1% cash back ($65) covers the annual fee. Below that, the free card costs you less. Above that, the paid card begins to save you money, but only if you're not giving up better rewards elsewhere.

What the rewards actually mean in dollars

Cash back percentages sound small until you calculate them against your real spending. If you spend $10,000 per year at Costco, the paid card returns $200 in cash back; the free card returns $100. The difference is $100, minus the $65 fee, for a net gain of $35. That's real money, but it's also not dramatic.

The math changes if you have another card that already offers 2% cash back on groceries or gas. Many cards (Chase Freedom Flex, Citi Double Cash, American Express Blue Cash Preferred, and others) return 2% to 5% on groceries, gas, or rotating categories. If you already earn 2% on groceries with a different card, switching that spending to the Costco card gains you nothing at Costco but loses you 1% on non-Costco purchases. That's a net loss.

The paid Costco card makes the most sense if you spend heavily at Costco and don't already have a card offering 2% or more on groceries and gas. If you have a card that does, the free Anywhere card is usually the better choice.

Costco membership is separate and required

The credit card is not a substitute for Costco membership. You must hold a valid Costco membership (Gold Star at $60/year, Executive at $130/year, or higher) to use either card. The card itself does not grant membership, and membership does not come with the card automatically.

This means the total cost of shopping at Costco with the paid credit card is the $65 card fee plus the $60–$130 membership fee. If you're on the fence about Costco membership itself, the credit card doesn't change that calculation. If you already have membership and are deciding which card to use, then the card fee is the only additional cost to weigh.

Approval and credit limits are Citi's decision

Citi, not Costco, decides whether to approve you for either card and what credit limit to offer. Your credit score, credit history, and income matter. Costco membership status does not may provide approval. If you're denied, Costco cannot override Citi's decision, and you can still shop at Costco with any other payment method.

If you're approved, Citi may offer a lower credit limit than you'd like. You can request an increase after a few months of on-time payments, but there's no may provide. The card's rewards don't matter if you can't use it for your full Costco shopping trip.

When the paid card makes financial sense

The Costco Visa Card is worth the $65 annual fee if all of the following are true: you spend at least $6,500 per year at Costco; you don't already have a card offering 2% or better cash back on groceries and gas; you pay the annual fee in full (not carrying a balance that would cost you more in interest); and you actually redeem the cash back (Costco issues it as a certificate mailed to you once per year).

If you spend $15,000 or more per year at Costco and use the card for gas as well, the math becomes clearer in the card's favour. At $15,000 in Costco spending alone, you earn $300 in cash back, which easily covers the $65 fee and leaves you $235 ahead. Add gas purchases and the advantage grows.

If you spend less than $6,500 per year at Costco, or if you already have a card offering comparable or better rewards, the free Anywhere card is the better choice. It costs nothing and still returns cash back, even if at a lower rate.

What happens to your cash back

Both cards issue cash back as an annual certificate, not as a statement credit or deposit to your bank account. Costco mails the certificate once per year, usually in January. You must bring it to a Costco warehouse or use it on Costco.com to redeem it. If you lose the certificate or don't redeem it within a certain timeframe (check your card agreement), you forfeit the cash back.

This is different from cards that automatically credit cash back to your account. It means you have to remember to use the certificate, and you can only spend it at Costco. If you prefer flexibility in how you use rewards, this structure is a drawback.

Frequently Asked Questions

Can I use the Costco card outside Costco?

Yes. Both cards work anywhere Visa is accepted. The paid card returns 1% cash back on non-Costco purchases (0.5% after $7,000 in gas per year). The free card returns 0.5% on non-Costco purchases. Neither card offers bonus rewards at restaurants, travel, or other categories, so they're not competitive with premium travel or dining cards.

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

Yes. Costco requires membership to use either card. You cannot hold the card without an active membership, and membership is not included with the card. If your membership lapses, your card remains active but you cannot use it at Costco warehouses.

What if I don't redeem my cash back certificate?

The certificate expires if you don't use it within the timeframe stated in your card agreement (typically one year). Expired certificates cannot be redeemed, and Costco does not issue replacements. Set a reminder when the certificate arrives so you don't lose the cash back you earned.

Is the Costco card worth it if I only shop there once or twice a year?

No. If you spend less than $1,000 per year at Costco, the free Anywhere card is the only sensible choice. The paid card's $65 fee would consume most or all of your cash back. Even occasional Costco shoppers come out ahead with the free card.

Can I have both the paid card and the free card at the same time?

No. Costco allows you to hold only one Costco credit card. If you want to switch from one to the other, you must close the first card before applying for the second. Closing a card can temporarily lower your credit score, so don't switch back and forth frequently.