I assume quite a few Dopers shop at Costco and have now signed up for the Costco Visa card. It comes with a variety of “cash back” arrangements. We’ve been using a Southwest Airlines Visa card which provides frequent flyer miles. So, now I have both, at least until I find a way to determine which provides the most financial benefit. Anyone have any ideas?
Related, I can’t help but wonder if all the card benefits are essentially the same in the long run.
actually you don’t have to have a Costco visa card you can use anything with visa on it
The Fidelity 2% cash back visa and the Citi doublecash 2% mastercard are the best general purpose credit cards. You can’t beat 2% with a 1 mile/$ card when southwest miles are capped in value at like 1.6 cents/each. For miles from someone like United or American with no fixed value some people beat 2 cents a mile making those better, but most people don’t.
You make more money from signup bonuses than from regular spend though - you’ll do a lot better than 2% back even if you just sign up for one card at a time, meet the spending, then move on to another one.
With the Costco Visa, you get
4% back on gas purchases up to $7,000 in a year
3% back on restaurant and travel
2% back on Costco purchases (I think the AMEX was 3%)
1% on all other purchases.
I think this is going to be better than the AMEX card for us. We don’t have a travel rewards card, and my husband travels extensively for business. We used to put the charges on our Amazon Visa, but this is much more lucrative. We’ll put all dining purchases on this card. I doubt we spend $7K on gas in a year, so all gas purchases will go on this card as well.
Anything else I’ll still put on our Amazon Visa.
My understanding is the Costco program is essentially a teaser arrangement good for only a year. ILl have to verify this, however.
The Costco card sounds like a good card. The main thing I dislike about their cards is that - unless I’m mistaken - the rewards are only payable in the form of store credits at Costco, and if you drop your membership you forfeit it. This keeps you locked in to your membership, since it’s generally less than the amount of credit you would be forfeiting, and feels restrictive.
I tend to like Costco and don’t specifically plan on dropping my membership, though my wife is somewhat more ambivalent.
Thanks. But the key question is whether you have to still be a member in order to redeem it for merchandise or cash?
Fotheringay-Phipps, you must be a member to get the Costco credit card, and the card acts as your membership card. You have to pay the membership fee, but there is no annual fee on the card. You do have to be a member to redeem the voucher, but if you have the credit card you are a member.
Yeah, I got all that.
The thing is: suppose one year I decide not to renew my membership. The problem is that at that point I would be walking away from my unredeemed rewards balance, which doesn’t vest until a few months after my membership needs to be renewed. So I’m locked into a cycle of renewing every year (unless I switch to a different card in a year in which I’m contemplating lapsing).
I have a Chase Visa card. I signed up for their quarterly deal that gives me 5% cash back on up to $1500 of purchases at Costco until Sept. 30.
So I’ll use that card until the deal expires (or I guess until I’ve reached $1500 in purchases, but since we’re not planning any major expenditures that’s unlikely), then I’ll switch to the Citi card for Costco.
Keeping track of what’s the best deal isn’t as simple as I’d like. Discover has its own calendar of special deals, so in any given quarter Card 1 may be better than Card 2 for certain categories.
I feel like the target market for a Costco visa is basically anyone is planning to be a member forever anyway, barring extraordinary circumstances. If you think you’re likely to drop your membership, then you’re probably looking elsewhere for your credit card needs.
The membership is what, $55? That’s well within the range of rewards cards annual fees and $1375 of gas purchases will cover the cost in rewards. I guess if you don’t have a costco nearby to collect it doesn’t make sense, but costco membership is not exactly an exorbitant household expense.
What’s relevant in this regard is the marginal difference between the Costco card rewards and the rewards from your other card. Quite a lot of cards give out rewards these days. So suppose using your Costco card for Costco purchases and gas gives you $92 a year. That’s more than $55. But had you used another card, you might have gotten $67. So you’re really only gaining the $25 difference by using that card.
But when renewal time comes up, you know that if you don’t renew and pay the $55, you lose the entire rewards balance (assuming I’m correct), which even in middle of the rewards-year might be as much or more than the $55 fee. So at that point you may as well renew, even though the amount you actually gained by using that card over another card is less than the $55 fee.
And the same thing happens every year.
I can’t speak for all of them, but the Costco near me has a separate door that goes to member services. (You don’t need a card–that’s how you sign up if you are not a member.)
I would think that it would be possible to drop your membership, get your voucher, and then just walk in to member services and exchange it for cash. I do not know if you must show a membership card when you try to make the cash exchange.
The problem is that your cash rewards only vest once a year, and it’s not (necessarily?) the same time as when your membership comes up for renewal.
Many credit cards have accumulating rewards balances that can be redeemed at more-or-less any time, but that’s not how the Costco rewards work.