The Costco Credit Card works best if you shop at Costco regularly and spend enough to offset the annual membership fee
The Costco Anywhere Visa Card by American Express is the only credit card Costco officially issues. It gives you 2% cash back on Costco purchases, 1% on everything else, and comes with a $65 annual fee (or $130 for the Executive version). Whether it makes sense depends on how much you actually spend at Costco and whether you'd use the card outside Costco.
The card is not required to shop at Costco — you can use any payment method at the register. But if you already have a Costco membership and use it regularly, the card's rewards can pay back its annual fee. If you rarely visit Costco or prefer other cards for their rewards structure, it probably won't.
Key Takeaways
- The Costco card charges a $65 annual fee for the standard version and $130 for the Executive version, so you need enough Costco spending to earn that back in cash back.
- You earn 2% cash back on Costco purchases and gas at Costco, 1% on everything else, and the rewards post as an annual statement credit you can use or cash out.
- The card is issued by American Express, so it is not accepted everywhere — check whether your regular stores take Amex before signing up.
- Costco membership and the credit card are separate: you can shop at Costco with any payment method, and you can hold the card without a membership (though rewards only apply to Costco purchases if you do).
- Other cards may offer higher rewards rates on groceries, gas, or dining, so compare your actual spending categories before deciding the Costco card is the best fit.
How much Costco spending you need to break even on the annual fee
The standard Costco card costs $65 per year. At 2% cash back on Costco purchases, you need to spend $3,250 at Costco annually to earn $65 in rewards and break even. That is about $270 per month. If your household spends more than that at Costco, the card pays for itself.
The Executive version costs $130 per year and includes additional benefits like extra rewards on dining and travel. You would need to spend $6,500 at Costco annually (about $540 per month) to earn $130 in cash back and break even on the card alone. The Executive version also offers a 2% reward on dining and travel purchases, which can help you reach that threshold if you spend on those categories.
To figure out your own break-even point, look at your Costco receipts from the past year or check your Costco account online — most members can see their annual spending. If you spent less than $3,250 last year, the standard card will not pay for itself. If you spent more, the math works in your favor.
Rewards structure and how cash back actually works
The Costco card earns cash back at these rates: 2% on Costco purchases (including gas at Costco pumps), 1% on all other purchases. Cash back is not instant — it posts as an annual statement credit once per year, usually in January. You can use that credit to pay your Costco bill, or you can request a check.
The 2% rate on Costco purchases is competitive, but only at Costco. Other cards offer 2% or higher on groceries at regular supermarkets, 3% to 5% on gas at non-Costco stations, or 3% to 4% on dining. If you split your spending across multiple stores, a different card might earn you more overall.
One practical limitation: the card is issued by American Express, which is not accepted everywhere. Before you sign up, check whether your regular grocery stores, gas stations, and restaurants take Amex. If you shop primarily at places that do not accept Amex, the card will be less useful.
Comparing the Costco card to other rewards cards
The choice between the Costco card and another rewards card depends on where you spend money. Here is how it breaks down:
| Spending Category | Costco Card Rate | Competing Card Examples | When Costco Wins |
|---|---|---|---|
| Costco groceries | 2% | Most grocery cards: 1% to 2% | If you do most grocery shopping at Costco |
| Costco gas | 2% | Gas cards: 3% to 4% | Only if you fill up at Costco exclusively |
| Groceries elsewhere | 1% | Grocery cards: 2% to 5% | Never — other cards are better |
| Gas elsewhere | 1% | Gas cards: 3% to 4% | Never — other cards are better |
| Dining | 1% (2% on Executive) | Dining cards: 3% to 4% | Only on Executive, and only if you spend heavily |
If you shop at Costco for most of your groceries and gas, the Costco card likely beats a general-purpose card. If you split your spending across multiple stores or prefer higher rewards on gas and dining, a different card will probably earn you more.
Costco membership and the credit card are separate decisions
You do not need the Costco credit card to shop at Costco, and you do not need a Costco membership to hold the card. However, the rewards only work if you have both a membership and you use the card at Costco.
If you have a Costco membership but use a different card at checkout, you still get member prices on items. You just do not earn the 2% cash back. If you hold the Costco card but do not have a membership, you can use the card for online purchases or at Costco Gas, but you cannot shop in the warehouse.
Costco membership costs $60 per year for Gold Star (standard) or $120 per year for Executive. The credit card fee is separate. So if you want both, you are paying at least $125 per year ($60 membership + $65 card) before you earn any rewards.
Annual fees, foreign transaction fees, and other costs
The standard Costco card has a $65 annual fee with no waiver for the first year — you pay it immediately. The Executive version costs $130 per year. American Express does not offer a trial period or a way to avoid the fee.
The card charges no foreign transaction fees, which is useful if you travel internationally. However, Amex is not accepted in many countries, so the lack of foreign fees is less relevant than it sounds.
There are no other hidden fees: no annual percentage rate (APR) is charged if you pay your full balance each month, no inactivity fees, and no fees for cash back or statement credits. The only ongoing cost is the annual membership fee.
When the Costco card does not make sense
Skip the Costco card if any of these apply to you: you spend less than $3,250 per year at Costco, you do not have a Costco membership and do not plan to get one, most of your regular stores do not accept American Express, or you earn higher rewards with a different card on your primary spending categories.
If you shop at Costco occasionally but do most of your grocery and gas shopping elsewhere, a cash-back card that rewards those categories will likely earn you more money. Similarly, if you value rewards on dining or travel, a card with higher rates in those categories will outpace the Costco card's 1% baseline.
You can also hold both the Costco card and another rewards card — use the Costco card at Costco and the other card everywhere else. This approach lets you capture the best rewards in each category, though it means managing two accounts.
How to decide: a simple checklist
Use this checklist to determine whether the Costco card makes sense for you:
- Do you have a Costco membership or plan to get one? If no, stop here.
- Did you spend more than $3,250 at Costco in the past year (or do you expect to)? If no, the card will not pay for itself.
- Do your regular stores accept American Express? If no, the card will be inconvenient to use.
- Do you earn higher rewards on groceries, gas, or dining with another card? If yes, compare the total annual rewards from both cards.
- If you have passed all four checks, the Costco card is likely a good fit.
If you are on the fence about spending, remember that the annual fee is charged upfront. You do not earn rewards first and then pay the fee — you pay $65 or $130 immediately, so you need to be confident you will spend enough to earn it back.
Frequently Asked Questions
Can I use the Costco card outside of Costco?
Yes, you can use it anywhere American Express is accepted. You earn 1% cash back on non-Costco purchases (2% on the Executive version for dining and travel). However, Amex is not accepted at all retailers, so check before you rely on it as your primary card.
What happens to my cash back rewards?
Cash back posts as an annual statement credit, usually in January. You can use it to pay your Costco bill, request a check, or let it sit as a credit on your account. You cannot transfer it to another card or convert it to points.
Do I need the Costco card to get member prices?
No. Any Costco member gets member prices regardless of which payment method you use. The card is only for earning the 2% cash back reward. You can shop with any card, cash, or payment method.
Is the Costco card worth it if I only shop there once or twice a year?
No. You need to spend at least $3,250 annually at Costco to earn back the $65 annual fee. If you shop infrequently, the card will cost you money overall.
Can I cancel the card and get my annual fee back?
American Express does not refund annual fees, even if you cancel immediately after paying. If you decide the card is not right for you, cancel before the next annual fee posts to avoid paying it again.