Since Costco is a warehouse club, most items sold there are $10 or more. Your bill will easily be more than $100 every time you visit Costco. But it’s also a great opportunity to get cashback on your purchases. Which credit card should you use at Costco to get the highest cashback?
What you need to know about Costco payments
Costco only accepts Visa credit cards
Costco only accepts Visa credit cards. Mastercard, Discover, and American Express credit cards are not accepted at the store. Even if you pay with a digital wallet such as Apple Pay or Google Pay, you must use a Visa credit card. But Costco accepts all debit cards.
2% Executive membership cashback
You don’t need to use your Costco Anywhere Visa card to get 2% Costco Executive membership rewards. You will get the rewards irrespective of how you pay. Even paying with Costco gift cards or VISA gifts cards will give you 2% cashback.
Which credit card should you use at Costco?
Chase Freedom Unlimited + Chase Sapphire Reserve Card
You can use your Chase Freedom card to get 1.5% cashback at Costco. You can then transfer those rewards to the Chase Sapphire Reserve and get 50% more points when you redeem through the Chase travel portal, giving you an effective cashback of 2.25% (1.5 *1.5 = 2.25%).
US Bank Altitude Reserve
US Bank Altitude Reserve offers 3x points on mobile wallet purchases as Google Pay or Apple Pay. You can redeem them at 1.5x (equivalent to 4.5% cashback) for travel purchases. Costco accepts mobile payments in-store and at the pump.
Bank of America Customized Cash Rewards
Bank of America Cash Rewards card allows you to choose a 3% cash back category of your choice. If you choose online shopping as your 3% cashback category, you can buy Costco Shops cards from the Costco website and get 3% cashback on your purchase. You can then use your Costco Shop Card to pay for your Costco in-store purchases. If you have a $100K Merill account, you can get an additional 2.25%, making your total cashback 5.25%
Costco Anywhere Visa card
If you are making a big purchase such as a TV or an appliance, Costco will extend the 1-year warranty by an additional year. In addition, the Costco Visa card gives you two years warranty after the Costco card expires. That’s a total of 4 years of warranty (1-year product warranty + 1 year Costco warranty + 2 years of warranty from the credit card). No other credit card gives such a long warranty period. The Costco Visa card also offers 3% cashback on restaurants and travel, and 4% cashback on gas purchased anywhere.
AOD Federal Credit Union Visa Signature card (Discontinued)
This card gives you 3% on all purchases with no categories or limits. This is ideal for big purchases at Costco. To get the AOD Federal Credit Union Visa Signature card, you must first open an account with the bank. For that, you must be a resident of Alabama or join an organization like the Northeast Alabama Bicycle Association (one-time cost $5). The bank also asks you to send a selfie and a few documents. Once you open an account, you can apply for a credit card.
Even if you only buy groceries at Costco, your bill can easily be over $100 every time you visit Costco. So it’s important to use the right credit card to maximize your cashback. US Bank Altitude Reserve can give you 4.5% cashback if you use the rewards for travel. Bank of America, AOD FCU (discontinued), and a combination of Chase Freedom Unlimited and Chase Sapphire can give you good cashback as well. Don’t overlook the Costco Visa card. Despite its 2% cashback, the card offers excellent extended warranty benefits. In addition, it also pays 3% cashback on dining and travel, and 4% on gas purchased anywhere.