The Costco Credit Card Is Worth It Only If You Shop at Costco Regularly and Spend Enough to Offset the Annual Fee

The Costco Anywhere Visa Card by Citi costs $65 per year ($130 for the Executive version). You earn 2% cash back on Costco purchases, 1% on everything else, and 3% on gas and travel. Whether that pays off depends entirely on your actual spending pattern, not on the rewards rate alone. If you spend less than $3,250 at Costco annually, the base card's rewards will not cover the $65 fee. If you do not have a Costco membership, you cannot use the card at all — the card requires active membership.

The real question is not whether the rewards sound good. It is whether the cash back you actually receive exceeds what you pay in fees. This article walks through the math, shows you how to calculate your own breakeven point, and explains what happens to your account if you close the card or let your membership lapse.

Key Takeaways

  • The base Costco card costs $65 yearly and requires an active Costco membership; you must own both to use the card at all.
  • You need to earn at least $65 in cash back per year to break even, which means spending roughly $3,250 at Costco or $6,500 on other purchases.
  • The Executive card ($130 yearly) makes sense only if you spend over $6,500 at Costco annually, because the 2% rate is the same but the fee doubles.
  • Cash back posts as a certificate mailed once yearly, not as a statement credit; you cannot use it outside Costco or combine it with other rewards.
  • Closing the card or letting your membership expire does not automatically close the card account, but you lose the ability to use it and may face inactivity fees.

How the Rewards Actually Work and What They Cost

The Costco Anywhere Visa earns cash back at these rates: 2% on Costco and Costco.com purchases, 1% on all other purchases, and 3% on gas (including Costco gas stations) and travel (airfare, hotels, car rentals, parking, tolls). The cash back is not automatic. Citi mails you a cash back certificate once per year, usually in December. You cannot redeem it online or over the phone — you must bring the certificate to a Costco warehouse to use it.

The $65 annual fee posts to your account on your card anniversary date (the month you opened the card). If you close the card before that date, you do not pay the fee for that year. If you close it after the anniversary, you have already paid. Citi does not prorate or refund annual fees.

To break even on the base card, you need $65 in cash back. At 2% on Costco purchases, that means spending $3,250 at Costco in a year. At 1% on other purchases, you would need $6,500 in non-Costco spending. Most cardholders mix both, so the real breakeven is somewhere between those numbers depending on where they spend.

When the Executive Card Makes Financial Sense

The Costco Anywhere Visa Executive card costs $130 per year and earns the same cash back rates as the base card: 2% at Costco, 1% elsewhere, 3% on gas and travel. The only difference is the fee. Because the rewards rate is identical, the Executive card only pays for itself if you earn at least $130 in cash back annually.

At 2% on Costco purchases, you need $6,500 in annual Costco spending to earn $130. If you spend less than that, the Executive card costs you $65 more per year than the base card with no additional reward. Costco's own analysis suggests the Executive card is worth it if you spend over $6,500 at Costco yearly, but that math assumes you earn nothing on non-Costco purchases — in reality, if you also use the card elsewhere, your breakeven point is lower.

The Executive card also includes a 2% reward on Costco purchases made through Costco Travel, but this is a subset of your regular Costco spending, not additional. You do not earn extra cash back; you earn the same 2% you would earn on any Costco purchase.

How Cash Back Certificates Work and Their Limitations

Cash back arrives as a physical certificate mailed to your address once per year. The certificate shows your total cash back balance and an expiration date (usually one year from issue). You must present it at a Costco warehouse to redeem it — you cannot use it online, by mail, or at Costco.com. If the certificate expires before you use it, the cash back is forfeited.

The certificate is treated as a Costco merchandise credit, not a statement credit. This means you can only spend it on items Costco sells: groceries, gas, pharmacy items, and other warehouse merchandise. You cannot use it to pay your credit card bill, and you cannot convert it to cash. If you do not have a Costco membership when the certificate arrives, you cannot redeem it.

If you close your card or let your membership expire before the certificate arrives, you lose access to the cash back. Citi does not mail certificates to non-members, and Costco will not honor a certificate if you do not have an active membership card.

What Happens to Your Account When You Close the Card or Stop Your Membership

Closing the Costco card does not automatically close your Citi account. The card itself becomes inactive, but Citi may keep the account open. If the account remains open and unused for an extended period, Citi may charge an inactivity fee or close it on their own. Check your cardholder agreement for Citi's specific inactivity policy, as it varies.

If your Costco membership expires but you keep the card open, you can no longer use the card at Costco or Costco.com. You can still use it as a regular Visa elsewhere, but you lose the 2% Costco reward. When your cash back certificate arrives, you cannot redeem it without an active membership. If you renew your membership later, you can use future certificates, but expired ones are gone.

If you want to close the card, call Citi at the number on the back of your card. Request closure and confirm whether you will be charged the annual fee for the current year. If you closed it before your anniversary date, you should not owe the fee. If you closed it after, the fee has already posted and will not be refunded.

Comparing the Costco Card to Other Rewards Cards

The Costco card's 2% cash back on Costco purchases is competitive, but it is not unique. Other cards offer similar or better rewards at Costco or in specific categories. The key difference is the annual fee and the certificate-only redemption.

A card with no annual fee and 1.5% cash back on all purchases would require $4,333 in annual spending to earn $65 — less than the Costco card's $3,250 breakeven on Costco-only purchases. However, that card would not give you 2% at Costco, so the comparison depends on where you actually spend. If 80% of your card spending is at Costco, the Costco card wins. If you split spending evenly across many retailers, a flat-rate card may be better.

The Costco card also has no sign-up bonus, no travel protections, and no purchase protections beyond what Visa provides. If those benefits matter to you, compare the full card terms, not just the rewards rate.

The Real Cost: Annual Fee Plus Costco Membership

The Costco card requires an active Costco membership. A Gold Star membership (the basic tier) costs $65 per year. An Executive membership costs $130 per year. If you do not already have a membership, the true cost of using the Costco card is the card fee plus the membership fee — $130 per year for the base card and membership, or $195 for the card and Executive membership.

This changes the breakeven calculation significantly. You now need to earn $130 in cash back just to cover both fees, not $65. At 2% on Costco purchases, that means $6,500 in annual Costco spending. If you were considering the card specifically to justify a membership, this math usually does not work unless you already shop at Costco regularly.

If you already have a Costco membership and shop there anyway, the card's $65 fee is the only incremental cost. In that case, the $3,250 breakeven applies, and the card is more likely to pay for itself.

Frequently Asked Questions

Can I use the Costco card if my membership expires?

No. The card requires an active membership to function. If your membership lapses, you cannot use the card at Costco or Costco.com, and you cannot redeem cash back certificates. You can still use the card as a regular Visa elsewhere, but you lose all Costco-specific benefits.

What if I earn less cash back than the annual fee?

You still pay the $65 (or $130) annual fee. Citi does not waive or refund the fee based on your rewards earnings. If you earn only $40 in cash back, you lose $25 that year. This is why calculating your own spending pattern before opening the card matters.

Can I redeem my cash back certificate online or by mail?

No. The certificate must be presented in person at a Costco warehouse. You cannot use it at Costco.com, and Costco will not mail you a replacement if you lose it. If the certificate expires before you use it, the cash back is forfeited.

Does the Executive card earn more cash back than the base card?

No. Both cards earn 2% at Costco, 1% elsewhere, and 3% on gas and travel. The Executive card's only advantage is a higher annual reward threshold if you spend very heavily at Costco, but the cash back rate itself is identical. The $130 fee makes it worthwhile only if you spend over $6,500 at Costco annually.

What happens if I close the card before my anniversary date?

You will not be charged the annual fee for that year. However, you will not receive a cash back certificate for the rewards you earned before closing. Call Citi to confirm the closure date and verify that no fee will post to your account.