What the Costco Visa Card is and who issues it

The Costco Visa Card is a credit card issued by Citi (Citibank) that you can use both inside Costco warehouses and anywhere Visa is accepted. You must have an active Costco membership to open one — the card and membership are separate purchases, but you cannot get the card without the membership. Citi handles the credit decisions, billing, and rewards; Costco sets the membership requirement and the rewards structure.

This is not a store card that works only at Costco. It is a Visa, which means you can use it at grocery stores, gas stations, restaurants, and online retailers worldwide. The rewards you earn, however, are designed to reward Costco shopping and everyday spending categories.

Key Takeaways

  • You must hold a current Costco membership to open the card, and the membership fee is separate from any card fees.
  • The card earns cash back in categories like Costco purchases, gas, restaurants, and travel, with rates varying by category.
  • There is no annual fee for the card itself, but you pay for your Costco membership separately each year.
  • Cash back rewards are paid as an annual statement credit or check, not as points you can redeem when ready.
  • Your credit score and payment history determine whether Citi will approve you and what interest rate you receive.

How cash back rewards work on the Costco card

The Costco Visa earns cash back at different rates depending on what you buy. At Costco warehouses and Costco.com, you earn 2% cash back. On gas (up to $7,500 per year, then 1% after that), restaurants, and travel, you earn 1% cash back. On all other purchases, you earn 1% cash back.

Cash back does not appear as a balance you can use when ready. Instead, Citi calculates your total rewards once per year and sends you a statement credit or check. You cannot transfer rewards to another card, use them to pay your balance early, or redeem them for merchandise. The rewards are paid out, not held in an account.

If you close the card or your Costco membership ends, you forfeit any cash back that has not yet been paid out. Rewards are only paid once annually, so if you close the card in month six, you lose the cash back you earned in months one through five.

Annual fees and membership costs

The Costco Visa Card itself has no annual fee. However, you must maintain an active Costco membership to keep the card open. Costco membership fees vary by membership tier — Gold Star (basic), Executive, and Business — and the cost increases periodically. You pay the membership fee to Costco directly, not to Citi.

If your membership lapses and you do not renew it, Citi may close your card or restrict its use. Some cardholders have reported that their card stops working at non-Costco merchants when the membership expires, though the card itself is not technically closed. Renewing your membership before it expires keeps the card active.

Interest rates and how credit approval works

The interest rate (called the APR, or annual percentage rate) you receive depends on your credit score, payment history, and income. Citi does not publish a single rate for this card. If you have excellent credit, you might receive a rate in the 16% to 18% range; if your credit is fair or poor, the rate could be higher. You can see the range of rates Citi offers before you submit your process.

Citi will pull your credit report and check your income when you explore. If you have recent late payments, high debt, or a low credit score, Citi may decline you or offer you a higher rate. There is no may provide of approval, and the rate you see advertised is not the rate you will receive — it depends on your individual credit profile.

If you are approved, you receive a credit limit, which is the maximum you can charge on the card. This limit is separate from your Costco membership and is based only on your creditworthiness.

When the Costco card makes financial sense

The card is most useful if you shop at Costco regularly and spend enough on gas, restaurants, or travel to earn meaningful cash back. If you spend $3,000 per year at Costco, you earn $60 in cash back. If you also spend $2,000 on gas and $1,500 on restaurants, you earn another $35 in cash back, for a total of $95 per year.

The card is less useful if you rarely visit Costco, pay your membership but do not use it, or if you carry a balance and pay interest. If you charge $5,000 and pay 18% interest for six months, you pay roughly $450 in interest — far more than any cash back you would earn. Using the card only for purchases you pay off in full each month protects you from interest charges.

If you do not have a Costco membership or do not plan to renew it, you cannot use this card, so it would not be a fit for you.

How to compare this card to other options

Other cash back cards offer rewards without a membership requirement. A general cash back card might earn 1.5% to 2% on all purchases with no annual fee and no membership. A grocery-focused card might earn 3% to 5% at grocery stores and gas stations. The trade-off is that the Costco card concentrates its highest rewards (2%) at Costco specifically, so it only beats other cards if you shop there regularly.

If you have a Costco membership and use it, the Costco card is worth comparing to your current card. If you do not have a membership or rarely shop there, a general cash back card with no annual fee or membership requirement may save you money.

Some people hold both the Costco card and another card — using the Costco card at Costco and for gas, and using a different card for groceries or restaurants where the other card earns more. This strategy works only if you pay both cards in full each month and do not overspend because you have multiple cards available.

What happens if you miss a payment or carry a balance

If you miss a payment, Citi reports it to the credit bureaus after 30 days. A late payment damages your credit score and stays on your credit report for seven years. Citi may also charge you a late fee (typically $25 to $40 for the first late payment, higher for repeat lates) and increase your interest rate.

If you carry a balance and pay interest, the interest charges will almost certainly exceed any cash back you earn. A $2,000 balance at 18% APR costs you $30 per month in interest alone. You would need to earn $360 in cash back per year just to break even, which requires spending roughly $18,000 per year at Costco or in other rewards categories.

If you are carrying debt on another card, paying off that debt before opening this card is usually the better financial move. The interest you save by eliminating debt outweighs the cash back you would earn.

Frequently Asked Questions

Can I use the Costco Visa outside of Costco?

Yes. It is a Visa, so you can use it anywhere Visa is accepted — grocery stores, gas stations, restaurants, online retailers, and more. The cash back rate is lower outside Costco (1% on most purchases), but the card works everywhere.

What if my Costco membership expires?

Your card may stop working at non-Costco merchants once your membership expires. Renew your membership before it lapses to keep the card active. If your membership has already expired, contact Citi to confirm whether the card is still usable outside Costco.

Do I have to pay an annual fee for the card?

No annual fee for the card itself, but you must pay for your Costco membership separately each year. The membership fee is what costs you money, not the card.

How often do I get my cash back rewards?

Cash back is paid once per year as a statement credit or check. You do not earn points you can redeem anytime — the rewards are calculated and paid out annually, usually in December or January.

What if I carry a balance on the card?

You will pay interest on the balance, and that interest will likely exceed any cash back you earn. The card is most useful if you pay the full balance each month and avoid interest charges.