The Costco credit card makes sense only if you shop at Costco regularly and spend enough to offset the annual fee

The Costco Anywhere Visa Card by Citi offers cash back on Costco purchases, but it comes with a $65 annual fee (or $120 for the Executive version). Whether it pays for itself depends entirely on your spending pattern. If you spend less than $3,250 per year at Costco, the 2% cash back on Costco purchases will not cover the fee. If you spend more, and especially if you use the card outside Costco, the rewards can add up.

The card is not a decision you make once and forget. You should revisit it every year or two and ask whether you actually used the rewards enough to justify the cost. Many people keep cards out of habit and lose money doing it.

Key Takeaways

  • The Costco Visa card charges a $65 annual fee and returns 2% cash back on Costco purchases, meaning you need to spend at least $3,250 per year at Costco just to break even.
  • The card also offers 1% cash back on all other purchases and 3% at gas stations and restaurants, which can add value if you use those categories regularly.
  • You must have a Costco membership to use the card, and the membership fee is separate from the card fee — you are paying both.
  • The card does not earn rewards on Costco gas purchases, only on gas at other stations, which is a common point of confusion.
  • If you do not spend enough to earn back the annual fee in cash rewards within a year, the card costs you money instead of saving it.

How the cash back actually works

The Costco Anywhere Visa Card returns 2% cash back on Costco purchases (including gas at Costco pumps, despite what many people believe — actually, Costco gas purchases earn 1% like other non-warehouse purchases). You earn 3% at gas stations outside Costco and at restaurants. You earn 1% on everything else.

Cash back posts to your account as a statement credit once per year, usually in January. You cannot choose to take it as a check or transfer it elsewhere. If you close the card before the cash back posts, you lose it. This matters if you are thinking about canceling — time it for after the annual statement closes.

There is no cap on how much cash back you can earn, and there is no sign-up bonus. The card straightforward returns a percentage on what you spend, month after month.

When the $65 annual fee actually costs you money

The math is straightforward. At 2% cash back on Costco purchases, you need to spend $3,250 per year at Costco to earn $65 in rewards. That is about $270 per month. If you spend less than that, the card loses you money.

The other rewards categories (3% at restaurants and gas, 1% everywhere else) can help you reach the break-even point faster, but they are smaller rewards on smaller spending. A household that spends $200 per month at restaurants and $100 per month on gas outside Costco would earn an extra $36 per year from those categories — still not enough to offset the fee if Costco spending is low.

The Executive version costs $120 per year and returns 2% cash back on Costco purchases, plus an additional 2% on the first $6,000 spent at gas stations and restaurants combined (then 1% after that). The Executive card makes sense only if you spend heavily in those categories or at Costco itself. You would need to spend roughly $6,000 per year at Costco alone to break even on the $120 fee.

The membership fee is separate and non-negotiable

You cannot use the Costco Visa card without a Costco membership. The membership costs $60 per year for a Gold Star membership (the basic level) or $120 for an Executive membership. The card fee is on top of that, not instead of it.

This is a point many people overlook. If you are considering the card, you are already paying for membership. The card fee is an additional cost. Your total annual cost to shop at Costco with the card is at minimum $125 per year ($60 membership plus $65 card fee).

What happens if you cancel the card

You can cancel the card at any time without penalty. Citi will not charge you an early termination fee. However, your cash back reward posts once per year, usually in January. If you cancel in February, you will not receive the cash back that would have posted in the following January — it disappears.

If you decide the card is not worth it, cancel after your annual statement closes and your cash back has posted. Then you can decide whether to renew the membership itself.

Closing the card does not affect your Costco membership. You can keep shopping at Costco with a regular membership card and pay with any other payment method.

How the Costco card compares to other rewards cards

The Costco card is not the only way to earn cash back at Costco. A general-purpose cash back card with no annual fee might return 1% to 1.5% on all purchases, including Costco. That would earn you $32 to $49 per year on $3,250 in Costco spending — less than the Costco card's $65, but also with no annual fee.

The Costco card wins if you spend enough at Costco specifically to make the 2% rate worth the fee, and if you also use the 3% categories (restaurants and non-Costco gas) regularly. It loses if you shop at Costco infrequently or if you would earn more from a flat-rate card with no fee.

Some people use both: a no-fee card for everyday purchases and the Costco card only for Costco trips. That approach works if you are disciplined about tracking which card to use where. Most people find it simpler to pick one.

Questions to ask before you explore

Before you decide, write down your actual Costco spending for the past year. Look at your bank or credit card statements and add it up. Do the same for restaurants and gas outside Costco. Then calculate: (Costco spending × 0.02) + (restaurant and non-Costco gas spending × 0.03) + (all other spending × 0.01). If that total is less than $65, the card costs you money.

Also ask whether you will actually use the card consistently. People often get a rewards card with good intentions and then forget to use it for certain purchases. If you will use it for Costco but pay for restaurants with cash or a different card, the rewards shrink.

Finally, check whether you carry a balance on credit cards. If you do, the interest you pay will almost certainly exceed any cash back you earn. In that case, no rewards card is worth it until you pay off the balance.

Frequently Asked Questions

Do I earn cash back on Costco gas?

No. Costco gas purchases earn 1% cash back, the same as other non-warehouse purchases. Many cardholders expect 2% because they assume all Costco purchases are treated the same, but the card specifically limits the 2% rate to warehouse purchases. Gas at other stations earns 3%.

Can I use the card at Costco.com?

Yes. Online purchases at Costco.com earn the same cash back rates as in-warehouse purchases: 2% on most items. Some items may be excluded or earn a different rate, so check your statement if you notice unexpected rewards.

What if I spend exactly $3,250 per year at Costco?

You would earn exactly $65 in cash back, which covers the annual fee but leaves you with zero net benefit. You are paying $65 to get $65 back. Add in the membership fee, and you are paying $125 to shop at Costco. A no-fee card would cost you nothing.

Does the card have a foreign transaction fee?

Yes. The Costco Visa card charges 3% on purchases made outside the United States. If you travel internationally or shop online from foreign retailers, this fee applies. Many travel rewards cards have no foreign transaction fee, so this is a disadvantage if you travel frequently.

Can I downgrade from the Executive card to the regular card?

Yes. Citi allows you to downgrade from the $120 Executive card to the $65 regular card without closing the account. You would receive a prorated refund of the difference if you downgrade partway through the year. Contact Citi to request the change.