Costco recently switched their co-branded card from Amex to Citibank. Now, in store, they accept only Visa credit cards (or Visa/MC debit cards). And, they now offer a co-branded Visa credit card instead of the old Amex Costco card.
On the surface, the new Costco Anywhere Visa card looks pretty awesome with 4% cash back for gas, 3% cash back for travel and dining, and 2% cash back for Costco purchases. And, the card has no annual fee.
When I plug in the above cash back categories to my Credit Card Analysis Spreadsheet, I find that the card averages an excellent 2.28% cash back given the spend assumptions in the spreadsheet (15% travel, 20% dining, 15% gas, 25% grocery: 12.5% Costco + 12.5% other grocery).
Even better, one can get a no-fee 2% cash back card (such as the Citi Double Cash or Fidelity Visa) and use that card anywhere that the Costco card earns less than 2%. In that case, the combination averages (with my spending assumptions) 2.65% cash back!
A better option
Given its high bonus categories and no-annual fee, I would declare the Costco Anywhere card to be the best cash back card, except for one thing… There’s a better option that has been around for a while: the Sam’s Club MasterCard.
As you can see above, the Sam’s Club MasterCard offers similar bonus categories to the Costco card, but with a higher cash back rate for gas (5% vs. Costco 4%), and without a bonus for spend at Sam’s Club itself (that’s weird).
A sharp reader may notice that the Sam’s Club card has a lower cap on its gas category: $6,000 per year vs. the Costco card’s $7,000 per year. That’s true, but the Sam’s Club card still comes out ahead for gas. Suppose you spend exactly $7,000 per year on gas. The Sam’s Club card would result in $310 cash back whereas the Costco card would result in just $280 cash back.
And, the strange lack of a bonus category for Sam’s Club purchases hardly matters at all. If you pair the Sam’s Club card with a 2% cash back card, you can still get 2% cash back at Sam’s Club and at Costco too (if you go with the Fidelity Rewards Visa 2% card). Overall, if paired with a 2% cash back card, my Credit Card Analysis Spreadsheet shows that the combination can average a whopping 2.8% cash back.
Best cash back combos and once per year redemptions
Last year I published “Best credit card combos: Cash Back”. In that post, I examined a number of different combinations of cash back cards to see which combinations were best. If you’re interested in cash back, I recommend checking out that post. If you’re more interested in points & miles, please see:
- Best credit card combos: Ultimate Rewards (earn up to 2.16 points per dollar)
- Best credit card combos: Membership Rewards (earn up to 2.56 points per dollar)
- Best credit card combos: ThankYou Rewards (earn up to 2.23 points per dollar)
- Best credit card combos: Mixed rewards (earn up to 3.23 points per dollar)
In the Cash Back Combos post, I complained about the way in which the Sam’s Club card delivered its rewards. I wrote:
This one has a fantastic combination of category bonuses, but cash back can only be retrieved once per year. It is paid in the form of a check made out to Sam’s Club. In order to cash the check, you have 180 days to get yourself physically to a Sam’s Club store. Yeesh.
Well, it turns out that the Costco Anywhere card works the same way. Here’s the text from the Costco Anywhere Visa landing page:
Cash back will be provided as an annual reward coupon in February billing statements, redeemable for cash or merchandise at US Costco Warehouses.
For some, that may be a big problem. Others may not mind the once per year in-store redemption option at all.
The new Costco Anywhere Visa card is a very good cash back card. However, the Sam’s Club MasterCard paired with a no-fee 2% cash back card is a bit better – even for those who shop regularly at Costco (if so, you would want to get the Fidelity Visa 2% card now that Costco accepts Visa). Of course, you would still need to go to Sam’s Club to redeem your cash back. So, if that’s not an option for you, the Costco card is well worth a look.
For the record, at least at the time of this writing, I have no affiliate links for either card.