The Best Credit Card to Use at Costco Is…

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As you may already know, beginning on June 20th Costco will make the big switch from accepting American Express cards to accepting Visa credit cards in their stores. I am not personally a huge Costco Fan Girl, but I know plenty of people who are, and so credit card companies obviously want their Visa card to be the one that you transition to using at Costco beginning next week.

Of course there is the new Costco Anywhere Visa by Citi card that will offer the following perks:

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases

New Costco Credit Card.jpg

However, the it turns out the actual Costco Visa card won’t be the best card to use at Costco in 2016. Chase may not be the one issuing the co-branded Costco card, but they seem to be the one with the best Costco cash back category this year!

The Chase Freedom with the rotating 5x bonus categories currently has wholesale clubs as one of their second quarter 5x bonus categories (along with grocery stores), but instead of that category ending on June 30th as was previously announced, a Chase rep told me today that wholesale clubs will continue to earn 5x (aka 5% cash back) until the end of 2016! This means that the Chase Freedom will earn 5x at Costco in 2016, as well as at other wholesale clubs.

Chase Freedom 5x 2016.jpg

The exact wording from Chase was:

Chase Freedom is announcing that it will continue to offer the 5% cash back category of Wholesale Clubs through the end of the year. Chase Freedom cardholders earn 5% cash back each quarter on up to $1,500 in combined purchases from Wholesale Clubs, including Costco®, BJ’s® and Sam’s Club®, and other additional rotating quarterly categories.

The 5% back from that card (or 5x points if you also have a premium Ultimate Rewards card) easily beats the 2% back at Costco offered by the Citi co-branded product, up to the quarterly max. Great news for those who are Costco or wholesale club shoppers!

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  1. The info you need is in the statement:
    “Chase Freedom cardholders earn 5% cash back each quarter on up to $1,500 in combined purchases from Wholesale Clubs”

    It is 5%/qtr or up to 7500+7500+7500 = 22500 UR with max spend in each of three quarters. Note that this amount is not in addition to the existing category spend.

  2. Yay !

    We are Big Time Costco shoppers. Meat, wine, paper products, cleaning products, bottled water, printer paper, occasionally electronics… We come home with a full trunk every trip.

    So this is wonderful news, as we had anticipated putting our 2 Freedom cards in the sock drawer for the third quarter. We are spending most of August in Europe, where the restaurant spend category bonus doesn’t count. Because of that, we won’t be eating out in July and September very much, if at all.

    But spending at Costco thru the end of the year, including for Christmas? Absolutely!

    Not a problem if we don’t max out that $3K a quarter, as there are always Costco Cash Cards to be purchased for use in 2017. 😉

    After all the bad news recently about miles and points devaluations and credit card denials, finally some great news. Thanks so much for this. 🙂

  3. This is what competition is about. Chase is just trying to blunt Citi’s Costco card launch by trumping Citi’s 1% to 4% rebate with the Freedom 5%, although this is subject to the $1,500 per quarter limit.

    • I just checked the T&Cs and just as an FYI, the Freedom 5% says it doesn’t include fuel purchases. So the Citi Costco Card still has good use.

  4. Another thing to make note of: Freedom’s 5% cash back on restaurants from July- September is also a better return than Citi’s Costco card of 3% cash back. Just thought I’d throw that out there too 🙂

  5. Thanks, MommyPoints, for this extremely useful info! This is fantastic news for us! And we read it here first!

  6. I don’t believe Costco accepts the Chase Freedom Card, they are very strict about which card they accept.

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