All the credit cards I’ve reviewed until now have focused on earning airline miles, hotel points or some form of transferable points (Chase Ultimate Rewards, Citi ThankYou Points or AMEX Membership rewards). However, when I talked about the differences in reward credit card there was another category I mentioned – the cash back card. This type of card won’t get you to overseas in a fancy cabin, but it may help you pay the taxes on the ticket you’re purchasing with miles you’ve earned in a different program. Taking into consideration that many cards today offer business and first class tickets at large discounts, it may be a better value to buy a ticket with cash instead of redeeming miles. A cash back card can help to offset those out of pocket expenses.
Most of the cash back cards offer a flat 1.5% to 2% back on purchases but one card stands out offering up to 4% back in some categories, albeit with some restrictions. If you’re already a member of their club, this may be a great card for your spending.
On April 1, 2016, Costco went from solely accepting American Express cards to only accepting Visa cards. This caused a huge shift because, until that time, the Costco credit card was issued by American Express. Citi was chosen to issue the new Costco Visa card and all previous holders of the AMEX card were transferred to the new Citi card.
The Citi Costco Anywhere Visa card earns cash back on every purchase and the money is issued as a check each February – it can be used to purchase merchandise or redeemed for cash at a Costco location. If you’re a frequent Costco shopper, this card might be an excellent choice for you. Here are the details on the card:
Annual Fee – There’s no annual fee for this card if you have a Costco membership. A basic membership at Costco starts at $55 a year (plus tax).
Sign Up Benefits – The Costco Anywhere Visa doesn’t give any sign-up bonus. This isn’t why you sign up for this card. So if you’re looking for a huge points bump, this isn’t the card for you.
Spending Bonus Categories – The Costco Anywhere Visa has some great bonus categories.
- 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 each year and then 1% thereafter.
- 3% cash back on restaurant and eligible travel purchases worldwide.
- 2% cash back on all other purchases from Costco and Costco.com
- 1% cash back on all other purchases.
Those are some generous categories and are better than other cash back cards since they don’t normally offer any bonus categories. The ability to earn 4% back on gas purchases anywhere, including Costco gas, which is normally not included in gas bonus categories for other cards, AND is usually cheaper than other gas stations, is a huge bonus. Earning 3% back on restaurant and travel is the same bonus as the 3x points with the Sapphire Reserve for the same categories. Now, people will argue that Ultimate Rewards are worth more than 1 cent each but the Sapphire Reserve costs $450 a year while the Costco Anywhere Visa is free if you already have a membership. You can do the math to see how that works out and how much you have to spend to break even.
No Foreign Transaction Fees – As of January 25, 2018, the Costco Anywhere Visa does not charge any foreign transaction fees. This is a huge bonus for a card with no annual fee. Since you can earn bonuses on gas, restaurant and travel purchases worldwide, not having to pay a transaction fee makes this a great card to use outside of the U.S. if you don’t have another travel credit card that waives those fees, as you can take advantage of the bonus categories without having to pay the fees.
Citi Price Rewind – This is a service where Citi will monitor the price on items you purchased with the card to see if the price goes down. After making your purchase, you go to the Citi Price Rewind website to register your purchase. I’ve gotten money back on everything from a lawn edger to our dog’s flea medicine.
Contactless Payments – The Citi Costco Anywhere Visa is a contactless card featuring technology allowing you to tap your card on the reader instead of using the chip or swiping the card. This means you can use the card to pay for your tickets on the Chicago Transit Authority or London Underground systems just by tapping your card on the turnstiles. This is also the form of payment used at many places around the world, so because they’ve eliminated the foreign transaction fees, you can use your Costco card around the world and look like an enlightened traveler.
In addition to these benefits, Citi also lists several travel protections on the Costco Anywhere Visa website. While they list several coverages, I can’t find any details on the amount of coverages offered. I’ll stick with the Sapphire Reserve or Citi Prestige travel benefits but if you’ve used this card and had travel delays, you may be eligible to file a claim for reimbursement. Here’s how Citi describes the coverages offered:
Trip Cancellation & Interruption Protection
Travel plans can go awry for many reasons. If certain unforeseen events get in the way of your trip, you may be reimbursed for non–refundable trip expenses, like change fees, provided you paid for the trip with your Citi card.
Worldwide Car Rental Insurance
Be more confident at the rental car counter — you may be covered against theft or damage to a rental car when you pay for your rental with your Citi card and decline the rental company’s collision loss/damage insurance.
Worldwide Travel Accident Insurance
Travel with more peace of mind when you pay for your trip with your Citi card. Worldwide Travel Accident Insurance is a type of coverage you hope to never need, but it may offer some financial help to you or your loved ones if a tragic accident does occur.
Travel & Emergency Assistance
If you need assistance before or during a trip, services are available 24/7 for emergency travel arrangements, travel issues, medical and legal referrals and much more. You won’t have to scramble to find services close to your location or worry about asking for help when you don’t speak the language. Referrals or assistance is at no cost, but you will pay for the services you use.
Claiming Your Reward Cash
There are some restrictions placed on redeeming your reward cash. Here’s the breakdown from the Citi website:
You must maintain your Costco Membership to receive and redeem your Costco Cash Rewards.
Redeeming Costco Cash Rewards: Your reward is distributed annually, in the form of a credit card reward certificate, once your February billing statement closes, and is redeemable through December 31 of the year issued in a single transaction at any U.S. Costco warehouse, including in Puerto Rico, for merchandise or cash back. The credit card reward certificate will contain your Costco Cash Rewards balance based on your eligible purchases during the annual reward period. The annual reward period is based on January through December billing statements. Should you choose to redeem only a portion of the certificate for merchandise, you will receive the remaining balance in cash at the Costco warehouse register upon checkout. Some warehouses may not permit the credit card reward certificate to be redeemed for alcohol purchases. Requests for cash may be fulfilled in the form of a check at Costco’s discretion. Your credit card reward certificate must be redeemed in person on or prior to its expiration date of December 31 in the year in which it is issued. Any Costco Cash Rewards you have earned on purchases made by authorized users on your Card Account will be added to your Costco Cash Rewards total. Only you, the primary cardmember, are eligible to receive the annual credit card reward certificate; however, you or anyone you authorize may redeem the certificate. You will not receive a credit card reward certificate if your reward is less than $1 or your account is closed at the time your credit card reward certificate is scheduled to be sent; any Costco Cash Rewards that had been accrued at that time will be forfeited. You must maintain your Costco Membership to redeem your credit card reward certificate.
So you need to remain a Costco member to cash in your rewards and you’ll be able to use it to pay for a single transaction and receive the difference back in cash or just cash the check at a Costco location before December 31st of the year you receive the check. Since the checks are issued in February, that gives you ten months to cash your check.
If you shop often for gas, groceries and everything else at Costco, this may be a good card for you to get. Very few cards offer bonus categories for wholesale clubs and that is even narrowed down when considering that you have to use a VISA card. The 2% back on Costco and Costco.com purchases and 4% back on all gas purchases (including Costco Gas) are some of the best out there. The one negative about the card is that you have to wait a year to get your bonus check and it needs to be redeemed at a Costco location. That’s not a big hardship for diehard Costco shoppers, but for someone who only goes there a few times a year, it might be a bit of a hassle.
Thanks to Mary B. for the heads up about the perks of having the Costco Anywhere Visa card.
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