Whether the Costco card makes sense depends on how much you spend at Costco and whether you use the other rewards categories
The Costco Anywhere Visa Card by American Express gives you 4% cash back on gas (up to $7,500 per year, then 1%), 3% on restaurants and travel, 2% on Costco purchases, and 1% on everything else. The card costs $65 per year ($130 for the Costco Anywhere Visa Card for American Express Business version). Whether it pays for itself comes down to your actual spending in those categories, not the headline rate.
If you spend $1,625 per year at Costco, the 2% cash back covers the annual fee. If you also use restaurants, gas, or travel, the 4% and 3% categories can add up quickly. But if you rarely buy gas, eat out infrequently, or travel by car, the card may not return enough to justify the fee.
The card has no foreign transaction fees and includes roadside assistance and travel protections, which matter if you travel internationally or use rental cars. It does not have a sign-up bonus, which is unusual for premium cards.
Key Takeaways
- You need to spend at least $1,625 per year at Costco for the 2% cash back to cover the $65 annual fee.
- The 4% gas category is capped at $7,500 per year in purchases (then drops to 1%), so heavy gas buyers hit the limit quickly.
- The card has no sign-up bonus, making it harder to justify the fee in your first year unless you already shop at Costco regularly.
- You must have a Costco membership to use the card, so the true annual cost is the card fee plus your membership fee combined.
- The card offers no rotating categories or bonus categories outside gas, restaurants, travel, and Costco — everyday purchases earn only 1%.
How the cash back categories work and where they cap out
The 4% gas category is the most valuable but has a hard limit. You earn 4% on the first $7,500 in gas purchases per year, which equals $300 in cash back. After you hit $7,500, gas purchases drop to 1% for the rest of the year. If you fill up twice a week at $60 per tank, you will hit the cap in about 63 weeks, meaning you earn the full 4% for roughly 10 months and then 1% for the remaining two months.
The 3% category covers restaurants and travel (including airfare, hotels, rental cars, parking, tolls, trains, and taxis). This category has no cap, so if you travel frequently or eat out regularly, it can be your largest source of cash back. A person who spends $3,000 per year on restaurants and travel earns $90 in cash back from this category alone.
The 2% Costco category applies to all purchases made at Costco warehouses and Costco.com. Gas bought at Costco pumps does not count toward Costco purchases — it counts as the 4% gas category instead. Costco purchases include groceries, household items, electronics, and anything else sold in the warehouse.
Everything outside these three categories earns 1% cash back. This includes groceries bought at other stores, drugstore purchases, utilities, and online shopping at non-Costco retailers. The 1% rate is lower than many competing cards offer.
The annual fee and whether it pays for itself
The $65 annual fee is charged once per year and does not waive in the first year. You pay it whether you use the card or not. To break even, you need to earn at least $65 in cash back annually.
At 2% cash back on Costco purchases, you need to spend $3,250 at Costco per year to earn $65. At 4% on gas, you need $1,625 in gas purchases. At 3% on restaurants and travel, you need $2,167. Most households that shop at Costco regularly will hit the $1,625 gas threshold or the $3,250 Costco threshold within a few months, making the fee worthwhile.
The card has no sign-up bonus, which means you do not get an extra cash back boost to offset the first year's fee. This is a disadvantage compared to cards like the Chase Sapphire Preferred or American Express Gold Card, which offer bonuses worth $200 to $500 in the first year.
If you are a new Costco member, the timing matters. Costco Gold Star memberships cost $65 per year, and the Executive membership costs $130. If you buy the card and join Costco in the same year, your total cost is $130 to $195 before you earn any cash back. You need higher spending to justify both fees together.
How the Costco card compares to other cash back cards
The Costco card's 4% gas rate is competitive but not unique. The American Express Blue Cash Preferred also offers 4% on gas (with a $1,500 annual cap, then 1%), but it charges $95 per year and requires higher spending to break even. The Citi Double Cash offers 2% on all purchases with no annual fee, making it better for people who do not shop at Costco or want simplicity.
For restaurants and travel, the Costco card's 3% is solid but not exceptional. The Chase Sapphire Preferred offers 3% on dining and travel but costs $95 per year and requires a higher sign-up bonus to justify the fee. The American Express Gold Card offers 4% on restaurants and 3% on travel but costs $250 per year.
The Costco card's 2% Costco rate is exclusive to Costco members and cannot be matched by other cards. If you spend heavily at Costco, this category alone may justify the card. But if you split your grocery and household shopping between Costco and other retailers, a flat-rate card like the Citi Double Cash (2% on everything) may earn more overall.
The key difference is that the Costco card requires you to be a Costco member and to concentrate your spending in specific categories. If your spending is spread across many retailers or you do not use the high-rate categories, a no-annual-fee card will likely earn more.
What happens to your cash back and how to use it
Cash back from the Costco card posts as a statement credit automatically once per year, usually in December. You do not request it or redeem it — it simply reduces your balance. This is simpler than cards that require you to log in and choose a redemption option, but it also means you cannot hold the cash back for a specific purchase or transfer it elsewhere.
The cash back does not expire as long as your account remains open. If you close the card, any unredeemed cash back is forfeited. This is different from some cards that let you redeem cash back even after closing the account.
You cannot convert cash back to Costco rewards or any other program. It is cash back only, applied as a statement credit. If you prefer points that can be transferred to travel partners or redeemed for merchandise, this card will not offer that flexibility.
Annual fee increases and what to watch for
Costco has raised the card's annual fee twice in the past decade. The fee was $55 before 2017, then increased to $65 in 2017, and has remained at $65 since. American Express can raise the fee at any time with 30 days' notice, though they typically announce increases in advance.
If the fee increases, you will receive notice before the new fee is charged. At that point, you can choose to keep the card at the new rate or close it. There is no grace period — if you want to avoid a higher fee, you must close the account before the new fee posts.
The card's rewards rates have not changed since its introduction, but American Express could alter them without notice. If you rely on the 4% gas rate or 2% Costco rate for your cash back strategy, monitor your statements for any changes to the terms.
When the Costco card makes sense and when it does not
The card is worth keeping if you meet at least one of these conditions: you spend more than $3,250 per year at Costco, you buy more than $1,625 in gas per year, or you spend more than $2,167 per year on restaurants and travel combined. Most regular Costco shoppers will hit at least one threshold within the first few months.
The card is not worth keeping if you shop at Costco infrequently, rarely buy gas, do not eat out or travel, or split your spending across many retailers. In these cases, a no-annual-fee card like the Citi Double Cash or a card with a lower annual fee will earn more cash back relative to what you pay.
If you are deciding whether to get the card for the first time, consider your spending in the past 12 months. Add up what you spent on gas, restaurants, travel, and Costco purchases. Multiply those amounts by the cash back rates (4%, 3%, 3%, and 2% respectively) and subtract $65. If the result is positive, the card will pay for itself. If it is negative or close to zero, wait until your spending increases or choose a different card.
Frequently Asked Questions
Do I need a Costco membership to get the Costco credit card?
Yes. You must have an active Costco membership to open and use the card. If your membership expires, your card will stop working. The membership fee ($65 for Gold Star, $130 for Executive) is separate from the card's $65 annual fee, so the total cost of both is $130 to $195 per year.
What happens if I close the card before the annual fee posts?
If you close the card before the annual fee is charged, you will not owe it. Most issuers charge the fee on the anniversary of your account opening, so you have until that date to decide. Once the fee posts, you cannot get it back by closing the card.
Can I use the Costco card outside the United States?
Yes. The card has no foreign transaction fees, which is valuable if you travel internationally. You earn the same cash back rates abroad as you do in the United States. The card is a Visa, so it is accepted at most merchants worldwide, though some countries prefer Mastercard or local payment methods.
Does the Costco card offer a sign-up bonus?
No. The Costco card has never offered a sign-up bonus. This is a disadvantage compared to competing premium cards, which often offer $200 to $500 in bonus cash back or points in the first year. If you are new to the card, you will not get any extra cash back to offset the annual fee.
What if I hit the $7,500 gas cap early in the year?
Once you reach $7,500 in gas purchases in a calendar year, all additional gas purchases earn 1% cash back instead of 4% for the rest of that year. The cap resets on January 1. If you drive heavily or have a large household, you may hit the cap by mid-year and earn a lower rate on gas for the remaining months.