Review of the Costco Rewards Card with Pros and Cons
If you’re a frequent patron of Costco, you know they’ve recently switched lenders to the Costco Anywhere Visa Card. For years, Costco used the American Express network. However, as of mid-2016, the Citi Costco credit card changed to the Visa network. The Costco credit card offers a variety of rewards for loyal cardholders. We will be reviewing the Costco Visa card, including a pro and con list. By the end, you’ll have a good grasp on whether or not the Costco credit card is right for you.
Costco Anywhere Visa Card Pros
Rewards Rate
The Costco Visa card offers a variety of rewards rates for its cardholders. The Costco Anywhere Visa Card offers four percent cash back on any eligible gas purchases up to $7,000. You’ll also get three percent cash back on certain travel and restaurant purchases. Every time you shop at Costco or the Costco site, you’ll get two percent cash back. Finally, you’ll get one percent cash back on everything else. These rewards have the potential to add up quickly, depending on how much you use your card.
No Limits
The Costco Anywhere Visa card has no limit to the amount of cash back you can earn. Once you’ve hit $7,000 annually, the reward percentages drop to 1 percent. However, there is still plenty of potential to earn a decent amount of cash back. If you spend an average of $1,325 a month, you’ll receive $300 in cash back. You can do this each year, without a limit.
No Minimum to Redeem
Unlike many rewards cards, the Costco Anywhere Visa card doesn’t have a minimum. If you have $1 in rewards, you can redeem them. However, you have to redeem them each year, or they expire on December 31st. You can redeem your rewards for Costco merchandise or cash back.
Introductory APR
The Costco rewards card has an introductory APR period of seven months. During this seven-month period, you’ll pay zero percent APR. This will allow you to pay off your balance in a few months instead of all at once. However, you want to pay it off before the introductory offer is over as the APR is a higher percentage.
No Annual Fee
The Costco Anywhere Visa card has no annual fee. This means that you can use your card year-round and not worry about a high annual fee. For a rewards card, this is a very good deal. Most high earning reward cards have an annual fee of over $100, so you’re saving money on that.
Costco Anywhere Visa Card Cons
Limited Redemption Period
If you’re looking for a cash back card you can redeem at any time, this isn’t the card for you. Your only option to get cash back is in February, and you get it as a certificate. In other words, if you get cash back in January, you won’t see it for thirteen months. This is a long time to wait, especially if you had plans for it.
Rewards Certificate Expires
The rewards certificate that you get in February expires on December 31st of the year it’s issued. This is bad news if you’re a person who tends to forget things or loses track of time. If you don’t redeem it before it expires, all of your cash back is gone.
High APR
The Costco Anywhere Visa card is a rewards card. That said, it has a high APR that can hurt if you plan to carry a balance. The APR is 16.24 percent, and it is variable. If you have an excellent credit score, it could be slightly less. This will still be a higher rate than a normal card though because it’s a rewards card.
Easy to Lose Rewards
If you close your account in the middle of the year, you’re wasting any rewards you’ve accrued since January. There is no way to redeem your current rewards; you’ll have to wait until February. This is a major downside, especially if you don’t want to wait to close your credit card account. You can always write off the rewards and close early, but you’ll be missing out.
Costco Membership
While there isn’t an annual fee with this card, you have to have a Costco membership. This membership fee is between $55 and $60 per year. It’s just like you’re paying an annual fee on the card, as it would be about the same amount. If you don’t have a Costco membership, you can’t have this card.
No Sign-Up Bonus
Many rewards cards offer a sign-up bonus to tempt new people into applying for a card. However, the Costco Anywhere Visa card has no sign-up bonus available. You open the card, and you get an introductory APR, and that’s it. So, this could be a drawback for anyone looking for immediate rewards.
Final Thoughts on the Costco Anywhere Visa Card
The Costco Anywhere Visa card is an excellent card if you’re a frequent Costco shopper. The four percent cash back option will add up quickly, and it lasts until you spend $7,000. This is a solid rewards card if you’re willing to wait to redeem your cash back. You have the potential to add $300 per year in profit if you spend correctly. Anyone who frequents Costco and has a membership should check into this no-frills rewards card.
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