The Real Rewards on a Costco Card
A Costco credit card gives you cash back on purchases, but the amount depends on where you shop. At Costco warehouses and Costco.com, you earn 2% cash back. At gas stations (including Costco gas), you earn 2%. At restaurants, you earn 3%. Everywhere else, you earn 1%. The cash back appears as an annual reward certificate that arrives in your mailbox, usually in February, and you can use it to buy anything at Costco or redeem it for a statement credit.
The card itself has no annual fee, which is different from some warehouse cards. You do need an active Costco membership to use the card, and that membership does cost money — Gold Star membership runs about $65 per year, though the exact amount varies by region and changes periodically. If you do not have a membership, the card is not an option for you.
The cash back rate is fixed — it does not change based on how much you spend or when you spend it. You earn the same 2% at Costco whether you buy $50 or $500 in groceries. This is different from some other grocery cards that offer bonus categories or tiered rewards.
Key Takeaways
- You earn 2% cash back at Costco warehouses and on Costco.com, 2% at gas stations, 3% at restaurants, and 1% everywhere else.
- The card has no annual fee, but you must have a Costco membership to use it, which does cost money.
- Your cash back arrives once per year as a reward certificate in the mail, not as points you can use when ready.
- The card is a Visa, so you can use it anywhere Visa is accepted, not just at Costco.
- You need to decide whether the cash back you earn will exceed the cost of your Costco membership to make the card worth your money.
How the Annual Reward Certificate Works
Your cash back does not sit in an account you can tap anytime. Instead, Costco mails you a physical reward certificate once per year, usually in February. The certificate shows your total cash back earned from the previous year. You bring it to a Costco warehouse or use it online at Costco.com to make a purchase, or you can ask Costco to convert it to a statement credit on your card.
The certificate expires one year from the date it is issued. If you do not use it within that year, you lose the cash back. This is a real constraint — if you travel or do not visit Costco regularly, you need to plan ahead to use the certificate before it expires. Some people set a phone reminder in January to make sure they remember.
The certificate amount is based on your spending from January through December of the previous year. If you spent $5,000 at Costco in 2024, you would earn $100 in cash back (2% of $5,000), and that $100 certificate would arrive in early 2025.
When the Costco Card Saves You Money
The card makes financial sense only if the cash back you earn exceeds what you pay for your Costco membership. If your Gold Star membership costs $65 per year and you earn $70 in cash back, you come out $5 ahead. If you earn $40 in cash back, you lose $25.
To figure out whether the card will pay for itself, think about how much you spend at Costco in a year. If you spend $3,250 per year at Costco, you earn $65 in cash back (2% of $3,250), which exactly covers a $65 membership. If you spend less than that, the card does not pay for the membership. If you spend more, you come out ahead.
The 3% cash back at restaurants and 1% everywhere else can add to your total, but most people earn the bulk of their cash back at Costco itself. If you rarely eat at restaurants or use the card outside Costco, those categories do not move the math much.
How the Card Compares to Other Grocery Cards
Most grocery cards offer higher cash back rates at supermarkets — often 3%, 4%, or even 5% in rotating categories. The Costco card offers a flat 2% at Costco, which is lower than what you might earn at a traditional grocery store with a different card. However, the Costco card has no annual fee and no spending caps, so you earn 2% on every dollar you spend at Costco, no matter how much.
The trade-off is that you can only use the Costco card at Costco if you want the 2% rate. If you shop at multiple stores, you would need a different card for your other grocery purchases. Some people use the Costco card for Costco and a separate grocery card for other stores, depending on where they shop most.
The 3% cash back at restaurants is competitive with some other cards, though many travel cards and premium cards offer higher rates at restaurants. The 1% everywhere else is standard but not exceptional.
What Happens If You Do Not Have a Costco Membership
You cannot get a Costco credit card without a Costco membership. The card is only for people who already pay to shop at Costco. If you do not have a membership and are thinking about getting one, the card could be part of that decision — but you need to decide whether the membership itself is worth the cost first.
If you shop at Costco occasionally but do not have a membership, you can ask a member to take you as a guest, but you cannot use the credit card. Some Costco locations offer day passes or trial memberships, which you can use to test whether shopping there makes sense for you before you commit to a full membership and a card.
The Card's Other Features
The Costco card is a Visa, which means you can use it anywhere Visa is accepted, not just at Costco. This is useful if you want to earn 1% cash back on everyday purchases outside Costco — groceries at other stores, gas at non-Costco stations, online shopping, and so on. The 1% rate is not high, but it is something.
The card does not have a sign-up bonus, rotating categories, or bonus cash back for specific purchases. You earn the same rate every time. There is no purchase protection, extended warranty, or travel benefits. The card is straightforward: you earn cash back, and that is the main feature.
The card is issued by Visa and Costco, not by a major bank like Chase or American Express. This means customer service goes through Costco, not a traditional credit card company. If you have questions about your account or rewards, you contact Costco directly.
Questions to Ask Before You Get the Card
Before you explore, ask yourself: How much do I spend at Costco in a year? If the answer is less than $3,250 (for a $65 membership), the card will not pay for itself. How often do I visit Costco? If you go once a month or less, you might forget to use your annual reward certificate before it expires. Do I already have a credit card I like? If you have a card with higher cash back rates at grocery stores, the Costco card might not be an upgrade.
Also consider: Do I want another card in my wallet? If you are trying to reduce the number of cards you carry, adding a Costco card means one more to track. Do I have good credit? Costco cards are easier to get than some premium cards, but you still need decent credit to be approved.
Frequently Asked Questions
Can I use the Costco card at other stores?
Yes, because it is a Visa. You earn 1% cash back on purchases outside Costco, restaurants, and gas stations. You earn the higher rates (2% or 3%) only in those specific categories.
What if I forget to use my reward certificate before it expires?
The certificate expires one year from the date it is issued. If you do not use it by then, you lose the cash back. Costco does not extend the expiration date or convert unused certificates to cash. Setting a phone reminder in January helps prevent this.
Do I need a Costco membership to get the card?
Yes. You must have an active Costco membership to open and use the card. If your membership lapses, your card may stop working. The membership fee is separate from the card and is not waived.
Is the Costco card better than a regular grocery card?
It depends on where you shop. If you spend most of your grocery money at Costco, the 2% cash back can add up. If you shop at multiple stores, a card that offers 3% or higher at all supermarkets might earn you more cash back overall.
Can I earn cash back on Costco gift cards?
Yes. When you buy a Costco gift card with your Costco credit card, you earn 2% cash back on the purchase, just as you would on any other Costco purchase.