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How to Make the Most of the Costco Anywhere Visa Card

Aug. 5, 2016
Cash Back Credit Cards, Credit Cards
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Costco’s switch from American Express to Visa in June 2016 rocked the world of many shoppers and caused competitors to ramp up their warehouse club rewards to appeal to Costco members. Despite problems with the rollout, the Costco Anywhere Visa® Card by Citi’s rewards are good enough that Costco members should take a serious look at the card.

In addition to a flat 1% rewards rate on all purchases, the Costco Anywhere Visa® Card by Citi pays higher rewards in a few key categories. Here’s how to maximize those rewards.

The Costco Anywhere Visa® Card by Citi as a gas card

A key to maximizing your value on the Costco Anywhere Visa® Card by Citi is to use it every time you get gas — and to pay attention to where you get gas.

The best gas credit cards don’t carry the brand of any station chain or oil company. Rather, they’re general-purpose cards that give you extra rewards on gas purchases. Among them are cards with rotating bonus categories. These cards typically give you 5% cash back on gas purchases — but only for three months of the year, and the amount of spending eligible for the 5% rate is capped, usually at $1,500. The next-best thing is probably the Blue Cash Preferred® Card from American Express, which pays 3% at U.S. gas stations, with no cap on eligible spending.

The Costco Anywhere Visa® Card by Citi, by contrast, pays 4% on up to $7,000 a year in gas purchases at Costco and most gas stations — but not including gas bought at other warehouse clubs. That works out to $583 in gas spending per month. If you spend significantly more than that, the Blue Cash Preferred® Card from American Express might be a better option for you because the gas rewards aren’t capped. (That card also has an annual fee of $95.)

Also take a look at how the Costco Anywhere Visa® Card by Citi’s gas rewards are worded. The card pays a 4% rewards rate on gasoline, not gas station purchases. That means you’ll earn 4% back on fuel for your car, but only the card’s standard 1% rewards rate on the Snickers bar you bought as fuel for the driver.

The Costco Anywhere Visa® Card by Citi as a travel and dining card

Unlike with the gas rewards, the kickback you’ll earn on restaurant spending and eligible travel purchases does not have a cap. You’ll earn 3% back on both categories, which is even higher than the rewards on the Nerds’ beloved Chase Sapphire Preferred® Card. So make sure you pull out this card whenever you’re eating out or out on the road.

Which purchases are eligible? Any stand-alone restaurant is included. The only ones prohibited are restaurants and cafes inside other warehouse club stores or grocery stores.

Eligible travel purchases are also fairly flexible. You get the higher rewards rate on airfare, hotel stays, rental cars, cruises and any trips booked through Costco Travel, the company’s in-house travel agency.

» MORE: NerdWallet’s best credit cards with no foreign transaction fees

Rewards at Costco itself

This card is available only to Costco members, a privilege that will cost you at least $55 a year. But the annual fee for the card itself is $0.

The Costco Anywhere Visa® Card by Citi pays 2% on all Costco purchases, in store and online. Other credit cards offer a flat 2% rewards rate on all purchases, so this is not a stellar perk by itself. But when paired with the higher rewards on gas, travel and restaurants, the card is a solid deal.

How to redeem rewards on the Costco Anywhere Visa® Card by Citi

Rewards redemption is a weak spot for the Costco Anywhere Visa® Card by Citi. Your rewards come in the form of an annual check-like coupon sent out every February. You have until the end of the year to bring that coupon to any Costco store for redemption. For a 21st-century shopper accustomed to monthly credit card rewards deposited into an online account or redeemed immediately, this can be a major inconvenience.

However, you don’t have to spend all your rewards at Costco. You can redeem your coupon for merchandise, but you can also get cash for it at the customer service counter. That way, you can spend your rewards wherever you like.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: virginia@nerdwallet.com. Twitter: @vcmcguire.