Credit Card

Best Credit Cards for Costco Purchases of October 2023

Costco shoppers are dedicated to the retailer’s bulk discounts and rotisserie chicken, but you need to make sure you have the right credit card before you shop there. Since 2016, Visa has been the exclusive credit card of Costco.

That means you won’t be able to pay in-store with a credit card backed by American Express, Mastercard or Discover. However, you can use a Mastercard or Discover card at Costco.com and via the Costco app. If you prefer to shop in-store at Costco with a credit card, then make sure you have a Visa-backed credit card.

Here are CNBC Select’s picks for the top credit cards for shopping at Costco.

Best credit cards for shopping at Costco

Costco Anywhere Visa® Card by Citi

  • Rewards

    4% cash back on eligible gas and EV charging purchases for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all other purchases from Costco and Costco.com; 1% cash back on all other purchases

  • Welcome bonus

  • Annual fee

    $0, Costco membership required

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

  • Balance transfer fee

    5% of each balance transfer; $5 minimum

  • Foreign transaction fee

  • Credit needed

Pros

  • Generous gas rewards
  • No fee charged on purchases made outside the U.S.

Cons

  • Costco membership is required
  • Rewards are distributed once a year and can only be redeemed at U.S. Costco Warehouses
  • No welcome bonus, so you can’t maximize rewards during the first few months of card opening
  • Estimated rewards earned after 1 year: $406
  • Estimated rewards earned after 5 years: $2,031

Who’s this for? Perhaps the most obvious choice is the Costco Anywhere Visa® Card by Citi. There is no annual fee, and the Costco membership requirement shouldn’t be an issue since you need a membership to shop at the warehouse (unless you share with a family member or friend).

Cardholders earn 4% cash back on eligible gas and EV charging purchases for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all eligible purchases from Costco and Costco.com; and 1% cash back on all other purchases.

One quirk about this card: You earn an annual reward certificate once a year, and it’s only redeemable at a U.S. Costco Warehouse. You can redeem the certificate for purchases at Costco, a Costco Shop Card (which can be used for purchases at Costco.com) or a cash (at Costco’s discretion). Learn more about how to redeem Costco credit card rewards.

Added perks include no foreign transaction fees, travel and emergency assistance, worldwide travel accident insurance and worldwide car rental insurance.

Want even more info? Here are 5 key things to know about the Costco Anywhere Visa Card.

Chase Freedom Unlimited®

  • Rewards

    Enjoy 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery services, 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; and 1.5% cash back on all other purchases.

  • Welcome bonus

    Special Offer: Unlimited Matched Cash Back. Use your card for all your purchases and at the end of your first year, Chase will automatically match all the cash back you earned! There is no limit to how much you can earn. Every dollar in cash back rewards you earn is a dollar Chase will match.

  • Annual fee

  • Intro APR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

  • Balance transfer fee

    Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee

    3% of each transaction in U.S. dollars

  • Credit needed

Pros

  • No annual fee
  • Rewards can be transferred to a Chase Ultimate Rewards card
  • Generous welcome bonus

Cons

  • 3% fee charged on foreign transactions

Who’s this for? The Chase Freedom Unlimited® has no annual fee and a simple cash-back program. Earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on dining at restaurants, including takeout, and drugstores and 1.5% on all other purchases. If you don’t want to deal with rotating bonus categories or activation, this card can be a simple way to earn cash back.

Cardholders can take advantage a generous welcome bonus: Unlimited matched cash back. At the end of your first year, Chase will automatically match all the cash back you earned.

The Chase Freedom Unlimited® offers a 0% intro APR for the first 15 months from account opening on new purchases and balance transfers (after, 20.49% – 29.24% variable APR). There’s an intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that it’s either $5 or 5% of the amount of each transfer, whichever is greater. Cardholders can also benefit from purchase protection and extended warranty protection.

Wells Fargo Active Cash® Card

On Wells Fargo’s secure site

  • Rewards

    Unlimited 2% cash rewards on purchases

  • Welcome bonus

    Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months

  • Annual fee

  • Intro APR

    0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate

  • Regular APR

    20.24%, 25.24%, or 29.99% variable APR on purchases and balance transfers

  • Balance transfer fee

    Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

  • Foreign transaction fee

  • Credit needed

Pros

  • Unlimited cash rewards
  • $200 cash rewards welcome bonus
  • No annual fee
  • Introductory APR period for first 15 months
  • Access to Visa Signature Concierge
  • Get up to $600 cell phone protection (subject to a $25 deductible)

Cons

  • 3% fee charged on foreign transactions

Who’s this for? The Wells Fargo Active Cash® Card is a solid cash-back card where you earn 2% cash rewards on all eligible purchases, as well as the opportunity to earn a $200 cash rewards welcome bonus after spending $500 in the first three months of account opening.

In addition, you will have a 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers (after, 20.24%, 25.24%, or 29.99% variable APR; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5). This is a great feature to use on large Costco purchases as it gives you an extended period to pay it off without incurring any interest.

Lastly, the card also comes with cell phone protection for up to $600 (subject to a $25 deductible) in case your phone is stolen or damaged. The card has no annual fee.

PenFed Power Cash Rewards Visa Signature® Card

  • Rewards

    1.5% cash back on all purchases, 2% cash back on all purchases for PenFed Honors Advantage members

  • Welcome bonus

    $100 statement credit when you spend $1,500 in the first 90 days of account opening

  • Annual fee

  • Intro APR

    0% introductory APR for 12 months on balance transfers made in the first 90 days after account opening.*

  • Regular APR

    17.99% variable on purchases; 17.99% non-variable on balance transfers

  • Balance transfer fee

  • Foreign transaction fee

  • Credit needed

Pros

  • 2% cash back on all purchases for PenFed Honors Advantage members
  • Welcome bonus, which is hard to find among flat-rate cash-back cards with no annual fee
  • No bonus category activations or limits to the amount of cash back you can earn

Cons

  • 3% balance transfer fee
  • Credit union membership is required
  • Estimated cash back earned after 1 year: $543
  • Estimated cash back earned after 5 years: $2,313

Rewards totals incorporate the points earned from the welcome bonus and assumes you’re a PenFed Honors Advantage member, earning 2% cash back

* 0% introductory APR for 12 months on balance transfers made in the first 90 days after account opening. After that, the APR for the unpaid balance and any new balance transfers will be a non-variable rate of 17.99%. 3% balance transfer fee per transaction. Subject to credit approval. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.

Who’s this for? The PenFed Power Cash Rewards Visa Signature® Card can earn you 2% cash back on every purchase, if you’re a PenFed Honors Advantage member (which requires a qualifying checking account or military affiliation). Otherwise, you earn 1.5% cash back on all purchases.

PenFed is a credit union, so membership is required to open a card. Anyone can join by applying, opening a savings account with a $5 deposit and maintaining a $5 account balance.

To earn the higher cash-back rate, you need to become an Honors Advantage member in one of several ways: be in an active military service status, a member of the Reserves or National Guard, an honorably discharged U.S. military veteran or retired from such service; be the primary owner on both the credit card and checking accounts of any existing open PenFed product (excluding PenCheck Limited accounts); or open a new Access America checking account (which requires a daily balance or monthly direct deposit of $500 or more to waive the $10 monthly service fee).

Chase Sapphire Preferred® Card

  • Rewards

    $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X points on all other purchases

  • Welcome bonus

    Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.

  • Annual fee

  • Intro APR

  • Regular APR

    21.49% – 28.49% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • Credit needed

Pros

  • Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
  • Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
  • Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
  • No fee charged on purchases made outside the U.S.

Cons

  • $95 annual fee
  • No introductory 0% APR

Who’s this for? The Chase Sapphire Preferred is one of the best travel credit cards available and pairs well with the other two Chase credit cards mentioned earlier. Chase Sapphire Preferred cardholders earn 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases.

This card is notable for the strong redemption rate when you redeem points for travel via Chase Ultimate Rewards. Points are worth 25% more, so the 60,000-point welcome bonus is worth up to $750 toward travel booked through Chase Ultimate Rewards (you need to spend $4,000 within the first three months to earn the bonus). This is a great way to maximize the value of points and the welcome bonus.

Beyond rewards, cardholders can benefit from helpful travel perks, such as a $50 annual Ultimate Rewards Hotel Credit, no foreign transaction fees, trip cancellation/interruption insurance, auto rental collision damage waiver, travel and emergency assistance services, baggage delay insurance and trip delay reimbursement.

Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

FAQs

What to know before applying

Making the most of your card

Credit cards provide numerous perks beyond the ability to buy now and pay later. You may earn bonus rewards in select categories, benefit from annual statement credits, receive a 0% APR period and many other benefits. Review what credit card benefits are offered by your card, then take full advantage of them.

So if you open the Citi® Double Cash Card, you receive no interest for the first 18 months on balance transfers (then 19.24% – 29.24% variable APR; see rates and fees). There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). Consider paying for any upcoming large purchases with that card and benefiting from interest-free financing.

Then if you plan on traveling abroad, cards like the Costco Anywhere Visa® Card, PenFed Power Cash Rewards Visa Signature® Card and Chase Sapphire Preferred® are the best options since they have no foreign transaction fees.

Don’t miss: The best store credit cards

Our methodology

To determine which cards offer the best value for Costco shoppers, Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

We also estimated how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee. Our final picks are weighted heavily toward the highest five-year returns, since it’s generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.

Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

Esri’s data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

It’s important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.