Best credit cards for Costco purchases

The Bank of America content was last updated on January 14, 2022.

Bulk shopping can offer incredible value to families – saving you hundreds of dollars on groceries and other staples throughout the year. And with affordable options for membership, Costco is a long-time favorite of warehouse club fanatics.

But on top of the savings you get from buying supplies in bulk, there’s another way to get more value out of your next Costco trip – using the right credit card. Costco itself offers a co-branded card that comes with competitive rewards on your purchases, and many other cards also offer top-notch rates on Costco spending. By swiping the right card in the checkout line, you can ensure you maximize your points or cash back return.

If you shop at Costco, read on to learn about our favorite credit cards for Costco spending and how much value they can provide.

Best credit card for cash back on gasoline

The Costco Anywhere Visa Card by Citi isn’t just a great card for Costco purchases; it’s an all-around great card to use as your go-to for every purchase to earn a high rewards rate — and it comes with no foreign transaction fee.

The card offers 4% cash back on up to $7,000 in gas purchases per year (1% thereafter) – from any eligible gas station, not just Costco – 3% cash back on restaurants and eligible travel purchases, 2% cash back on Costco purchases and 1% cash back on other general purchases.

The bonuses on gas and restaurant purchases are generous, pushing the potential earning rate to nearly 2% of your spending, based on our estimations. If you spend heavily in a particular category, like restaurants, you could push your cash back earnings higher than 2%.

There is one major drawback to the Citi Costco Visa, however: You receive your cash back once a year. Cash back rewards are mailed as a certificate in February, which you must take to your local Costco to redeem for purchases or for cash back at the register. If your Costco membership expires before the certificate is sent, you forfeit all earnings for that year.

Avid Costco shoppers may view this as a moot point. But, if you are on the fence about your Costco membership, or if you would prefer to get your hands on your cash back sooner, you may want to consider a rewards card that is less restrictive at redemption.

You can’t beat the Costco card for Costco gas purchases

If you’re trying to decide which rewards card to wield at the pump, the Costco Visa is usually the best option. Getting 4% cash back on Costco’s already discounted gasoline is a good deal. While there are a few other cards that offer a 5% cash back rate on gas purchases, their rewards terms generally exclude Costco and other warehouse stores.

Best credit card for rewards value

The Chase Freedom Unlimited® card may not seem like the best bet for Costco purchases. After all, its 1.5% cash back rate is lower than the 2% rate that you can earn with the Costco card. But the Chase Freedom Unlimited may offer a better rewards value, especially with the newly added rewards categories.

You can transfer the rewards points that you earn on the Chase Freedom Unlimited to some other Chase cards, including the Chase Sapphire Preferred® Card, then you can redeem them for travel rewards or transfer them to one of Chase’s airline partners to get an even better value on your points.

The tables below show the value of the different redemption options for each card. As you can see from the first table, your earnings from the Costco card for $2,500 spent at Costco amount to $50 – no more, no less:

Rewards on $2,500 Costco spend: Costco card

With the Chase Freedom Unlimited card, the value of your points varies drastically, depending on how you redeem them. If you opt for cash back (i.e., a statement credit), you get only $38 worth of value, which pales in comparison to the Costco card.

However, if you transfer your points to the Chase Sapphire Preferred or Chase Sapphire Reserve® card, you can boost the value of your points by redeeming them for travel through the Chase Ultimate Rewards portal, where you get a 25% (Preferred) to 50% (Reserve) redemption bonus.

And, if you transfer the points to an airline partner, you can do even better by carefully searching for airfare options with higher values. For instance, Southwest points are very valuable (we value them at 1.6 cents per point on average). The Chase Freedom Unlimited rewards you’ve earned on your Costco spending could be worth $59 or more if you transfer them to Southwest’s loyalty program.

Rewards on $2,500 Costco spend: Chase Freedom Unlimited card

Best credit card for travel rewards

If you prefer a rewards card with the same flat rate on any purchase, this one’s a no-brainer: The Capital One Venture Rewards Credit Card is the way to go. It offers a 2-miles-per-dollar rewards rate on all your spending, including Costco purchases. Like the Citi Costco card, miles on the Capital One Venture card are valued at 1 cent when redeemed for travel, which means $2,500 in spending will net you $50 in travel rewards.

However, unlike the Citi Costco card, the Venture card is extremely flexible regarding how you redeem your rewards. You can redeem any amount at any time, and you have a variety of redemption options, including cash back, merchandise and travel.

One drawback, however: The card includes a $95 annual fee.

Best credit card for flat-rate cash back

Besides the Capital One Venture card, there are a few other cards that offer a 2% cash back rate on Costco purchases.

The Power Cash Rewards Visa Signature® Card, for example, offers a flat 2% rewards rate on your purchases. On the downside, this card requires you to be a PenFed Honors Advantage Member to earn the 2% rate. Still, for current cardholders, the Power Cash Rewards Visa Signature is a better option for Costco purchases, since you can redeem your rewards at any time.

Best credit card for flexible redemption offers

The Bank of America® Customized Cash Rewards credit card offers 2% cash back on grocery store and wholesale club purchases, in addition to 3% back on a category of your choice from the following six options: gas, online shopping, dining, travel, drugstore or home improvement; (2% and 3% categories capped at $2,500 in spend per quarter, then 1%) and 1% back on all other purchases.

The Bank of America Customized Cash Rewards credit card is a solid choice when shopping at Costco. Its exceptional rewards rate is hard to beat when it comes to flexibility. Plus, new cardholders will receive $200 in online cash rewards after spending $1,000 in the first 90 days.

Bottom line

Costco shoppers have the potential of earning big while shopping in bulk, but this level of success requires the right credit card. It’s important to highlight that Costco accepts only Visa credit cards, which means your Mastercard or Amex will not make it through the front door, much like individuals without a Costco membership.

However, despite the restrictive Visa-only policy, there is a handful of great credit cards that will deliver solid rewards when shopping at Costco. You simply need to decide which one works best for you.

*Information about the Chase Freedom has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.