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American Express Costco TrueEarnings

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Verdict – This is the best credit card for those who pump gas at Costco. Otherwise, it is still one of the best all around credit cards due to its 3% rewards on gas and restaurants, 2% rewards on travel, and 1% rewards elsewhere.

This card excels when you pump gas at Costco. This is because Costco only accepts American Express, and bonus rewards on gas with other cards do not work at wholesalers like Costco, while the Costco card’s 3% back does. Therefore, this may be the best gas card out there when you consider that Costco stations tend to be cheaper than most other gas stations.

American Express Costco Credit Card also offers a great reward rate on restaurants (3%), and travel (2%). This makes it a versatile, all around credit card for those of you who don’t like to lug around 10 credit cards. Yes, there are better cards for individual categories like Citi Forward (5% on dining), and PenFed Platinum Cashback (5% on gas), but it becomes a question of how many bills you want to keep track of.

Points are redeemable for cash or Costco credit. Note that the 3% gas rebate is capped at $3000 per year, after which it reverts to the 1% base rate.

No annual fee, sort of…
You need a Costco membership to avoid paying an annual fee.

Reward Redemption
You get your reward in the form of a Costco gift certificate once a year. The certificate can be exchanged for cash, a check, or Costco Cash at your local Costco.

While this card is a popular choice with Costco customers, be sure to search our cash rewards cards page – there are better rewards cards out there unless you spend more than most on gas and restaurants.

Own a business?
Consider the Costco Business card, which is pretty much the same card except for with 4% back on gas and twice the monthly fuel allowance ($6000/yr instead of $3000/yr).

  • http://www.nerdwallet.com admin

    Note that the Business version of this card earns 4% on gas up to $6,000 per year.

  • Sam

    Hi Nerdwallet!

    Just found your site and love it! One thing I believe is wrong though- The Costco American Express gives you 3% back for gas at ANY gas station. Also note, the Costco Gift certificate provided annually can be redeemed for cash at a Costco location.

    Thanks!

    • http://www.nerdwallet.com NerdWallet

      Hi Sam, you are right. Our point was more that the 3% cash back bonus is even more powerful when used to buy discount Costco gas. We didn’t mean to imply that this card can only be used at Costco.

      In fact, I use mine at every gas station I can!

  • Peter

    Question: Does anyone know more detail about the 3% cashback on Restaurants? Does that include fastfood? Takeout? Or just full sit-down restaurants? Right now I have the PNC Everday Rewards card (just stopped being offered) and it gives 2% cashback on anything food – grocery stores, restaurants, fast food, etc. up to $750 a month. More details on this rewards category on this Costco card would be appreciated!

    • http://www.nerdwallet.com NerdWallet

      Peter, the 3% applies to any merchant that designates itself as a “restaurant” when sending transactions along to the credit card networks. This includes sit-down restaurants, fast food, takeout, coffee shops, and even many bars. It would not apply for grocery stores.

      Unfortunately the only way to ever know for sure whether a certain merchant qualifies for 3% cash back is to look at your statement after the fact. It’s not really the credit card company that decides, the merchant has to configure their credit card transactions appropriately.

  • Caris

    Regarding the 3% on restaurants, it is quite disappointing to be just days away from receiving the rebate voucher, and to realize that they have not given me 3% back on many restaurant charges. I just checked my year-end analysis which shows you how charges are categorized, and a significant amount of restaurant charges were randomly listed as furnishings (1% rebate), groceries (1%), business (1%), and even travel (1%). I tried taking this up with American Express, but have not gotten very far.

    • http://www.nerdwallet.com NerdWallet

      Yeah Caris, the credit card companies generally refuse to help with these sorts of things (and it’s extremely frustrating).

      You should try calling the merchants themselves and asking what’s up. If a restaurateur is mis-billing his credit card transactions as “furnishings,” then you’re not the only one getting ripped off. If you get in touch with anyone, could you report back and let us know how it goes??

  • M

    On the gas rewards, my fine print says “excluding superstores, supermarkets, convenience stores and warehouse clubs other than Costco.” I understand that they don’t want to support sales with their competitors (Sam’s club, Giant Eagle, etc.), but what do they define as a convenience store? Is this considered places like Sheetz and 7-11? I feel like this label could include any stand alone gas station that happens to sell even the smallest amount of merchandise. Just wondering if you have any thoughts on their definitions of these terms.

    • http://www.nerdwallet.com NerdWallet

      To be honest with you M, I think they’re just trying to cover their asses with that language. I don’t think it means gas stations that happen to have convenience stores, I believe it’s meant primarily to exclude other warehouse stores and department store chains (like Sam’s Club, as you mention).

      And what I mean by covering their asses is that rewards are determined based on how the merchant inputs the transaction, and what sort of processing code they use. It’s really not up to the credit card issuer to figure that out. So if a 7-11 uses a “convenience store” code instead of a “gas station” code, Amex and Costco don’t want to be held liable.

      I can say from my own experience that I’ve been using this card for all of my gas purchases for a year now and haven’t seen anything fishy in the way the rewards were calculated (yet).

      • http://twitter.com/CallahanKyle Kyle Callahan

        The type of merchant code is a very important point. Its time for me to renew my Costco membership and I have been considering this card for a while. Even with modest spending, it should be easy to accumulate enough cash-back rewards to offset the basic $50 annual membership. I was questioning the language regarding convenience stores since I’ve never seen a stand-alone gas station that didn’t sell bottled drinks and snack foods. Glad to know most locations (minus grocers stations) will qualify for 3% back.

  • http://www.facebook.com/profile.php?id=205295 Tim Chen

    You get your rewards redemption once a year in either your Feb or Mar statement. You can use the redemption coupon at a Costco store for either merchandise or cash back, but be careful – it expires Aug 31 the same year.

  • Fill ‘er up

    I have the True Earnings Costco Card from American Express and have been very disappointed.  Although it is not mentioned in your card summary, the 3% cash back on gasoline only applies to gasoline from Costco and “free standing gas stations”.  A free standing gas station is one without a convenience store.  Thus far, I have not received the 3% cash back for the purchase gas at a non Costco gas station because virtually every gas station has some sort of convenience store associated with it. I think the 3% cash back description is very misleading. The last time that I was at Costco, they had a salesperson touting the 3% cash back benefit for all gas purchases which is clearly misleading.  I will likely cancel the card and seek out alternative cards.

    • Wrabble

      You are mistaken in your interpretation about which gas stations are eligible for the 3% cash back. 

      I routinely buy gas at a couple of stations (BP & Shell) which have convenience stores and I get the 3% rate on gas purchases there.  I have gotten the 3% rate at a lot of other stations with convenience stores, like big truck stops out on interstate highways.  I get 1% for purchases at gas stations that are part of grocery stores.

    • Spjutster

      A free standing gas store can have a convenience store associated with it (I fill up at Chevron all the time and get my 3% reward). Discount gas stations at supermarkets and the like are not freestanding however, so you’d only get the 1% cash back.

    • Menauhant

      About a year ago I noticed that my gas purchases were not being credited. Today I had to call AMEX/Costco with another question and decided to look into this. I buy gas at a full service gas only (no services/repairs/or convenience store) and do not get credit. The AMEX Customer Service person told me that the station is billing the purchase as a service not as a gas purchase. Why would they do this? My guess is that AMEX charges the merchant an additional fee if they bill it as a gas purchase. They suggested that I ask my gas station why they don’t just bill it as a gas sale. I doubt it if the person pumping the gas will know what I am talking about. I did get credit for an Exxon/Mobil gas purchase even though it was a General Store that also sold gas. The owner of the store did ask me if I would mind not using my AMEX and either use cash or a Visa or Master Card. The fees are killing him. So bottom line I know why AMEX is not giving me my rewards but I still don’t know why gas purchased at a gas only station can be billed as something other than gas. The only reason I will be keeping this card is because I like Costco.

  • Spolatis

    I made this comment elsewhere, but I’ve found that unless this card is used as a charge card with paying off the balance monthly vs. leaving a partial balance, any rebate is quickly cancelled by the fact that interest begins to accrue from the moment a purchase is made without the benefit of a grace period. This interest rate of 15.4 percent (over 27percent if a late payment occurs) eats up the benefit ofq any rebate and then some. The company’s customer service begrudgingly admitted this to be true. Apparently it’s in the fine print. Caveat Emptor!
    SMP

    • Spjutster

      I have had this card for a year and have paid my balances off every month in full without any interest paid.

      • http://www.nerdwallet.com/ NerdWallet

        Generally, the rule of thumb is that if you’re going to carry a large balance (or will carry one frequently) you’re better off getting a low APR card without rewards, since as you said any rewards earned will be cancelled out by interest payments.

  • Colleen

    Beware: When you go online to pay this card, it comes up very differently and very misleading from other AMEX cards. My other AMEX card shows “amount due” and it matches with the statement. Costco Amex comes up with a lesser amount than is due on the statement and you have to enter the correct amount. That is BULLS@ITT and I am going to cancel this card immediately. They took off the interest charge and finance charge when I complained, but I still can’t make the online payments makes sense. They also claimed I paid it late until I scanned the payment history and sent it to them. I don’t like being ripped off!

  • Ernest S.

    Update: As of last summer, the card only offers 3% on gas. The restaurant rewards rate is down to 2%.