Are the Costco Credit Cards Worth it?August 11, 2023
Groceries can be costly. Because of that, many Canadians choose to shop at warehouse clubs, the most popular of those being Costco. If you’re a Costco member, you may know that Costco offers their own credit card. How exactly does this work, though?
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Who can get the card? What are the rates? Are there any other credit cards that can be used at Costco? Well, these are all very good questions.
When it comes to figuring out if the Costco credit card is good for you, it’s important to answer these questions as well as weigh the credit card benefits. Maybe there’s another card out there that is still beneficial to use at Costco but will allow you access to other benefits as well.
Costco and Credit Cards
If you’re in the market for a Costco credit card, the one they are offering is the CIBC Costco Mastercard. This card is a rewards card designed exclusively available to Costco members, and they earn 3% on Costco gas and restaurant purchases. You can earn 2% at all other gas stations and Costco.ca purchases. You can earn 1% on all other purchases, including Costco.
Another nice feature of this card is that it has no annual fees other than your Costco membership fees. The purchase interest rate is 19.75%, and the cash interest rate is 21.49%.
Some other awesome features included with this Costco credit card are that you can redeem your cashback annually for a Costco gift card to any Canadian Costco warehouse. With certain Costco purchases, you can also invoke the CIBC Pace It plans, which is where you pay the purchase back in installments. Plus, you also get Mobile Device Insurance as well as Purchase Security and Extended Warranty insurance.
With the CIBC Pace It plans, the interest rate is different from your purchase interest rate and is based on what timeline you choose. For the 6-month option, the interest rate is 4.99%. For the 12-month option, your rate is 5.99%, and 6.99% for the 24-month option.
Other Rewards Credit Cards
Just because Costco has partnered with CIBC, that doesn’t mean you can’t use other rewards cards. That said, though, they do have a partnership with Mastercard. This means that you cannot use American Express or Visa cards at Costco in Canada. That said, let’s take a look at some other cash-back cards that are great to use at Costco. Plus, you could also earn some bonus rewards.
KOHO Prepaid Mastercard
The KOHO Prepaid Mastercard is a no-fee spending account that acts as a Mastercard. It not only helps you budget and save, but you also get to earn rewards like a credit card but without the interest rates and fees.
One of the reasons that it’s a great credit card to use at Costco is that you earn 2% cash back on all grocery purchases, and Costco is included in this. Plus, you can earn 5% cash back on purchases online with their partners. It holds the benefits of a Mastercard, with the benefits of a bank account.
National Bank World Elite Mastercard
With the National Bank World Elite Mastercard, you earn points on everyday purchases and receive travel perks and rewards. There’s an annual fee of $150, the purchase interest rate is 20.99%, and the balance transfer fee is the same as the cash advance interest rate at 22.49%.
There are a few different benefits with this card as well. You can redeem points for:
- Gift cards
- Travel discounts
You can also enjoy exclusive travel perks like unlimited access to Montreal-Trudeau Airport’s National Bank Lounge and up to $150 per year in travel expenses. You can even get extended warranty coverage on your purchases.
Earning points with this credit card is pretty simple as well. You earn 5 points per dollar on grocery and restaurant purchases, 2 points per dollar on fuel, EV charging purchases and recurring bill payments, and 1 point per dollar on other purchases. This is valid for the first $2,500 spent on the card. After that, you only earn 2 points per dollar on grocery and restaurant purchases. If you shop at Costco a lot, you can earn points fast.
Rogers World Elite Mastercard
Rogers World Elite Mastercard is another great card you can use at Costco, plus it has no annual fee. That said, their requirements are a bit stricter than some other Mastercards. Not only do you have to meet their credit requirements, they also have an income requirement. You must make at least $80.000 per year in personal income or at least $150,000 in household income to qualify. In order to maintain your qualifications, you need to spend at least $15,000 per year on your card. If none of these things are an issue for you, then it could be a great option.
The perks with this card are that you can receive 1.5% cash back on all eligible purchases and 3% cash back on those made in US dollars. Plus, you can get a sign-up bonus of $25 in cash-back rewards as a welcome bonus on your purchase as long as it’s made within 3 months of receiving your card.
If you love to travel, you can always use your Mastercard to purchase with Costco Travel and earn points. As a bonus, included with your Mastercard, you get trip interruption insurance, trip cancellation insurance, as well as out-of-province and out-of-country medical and emergency insurance. It also includes:
- Rental car insurance
- Extended warranty protection
- Purchase protection
- Access to over 1,300 airport lounges at only $32 USD per person
- Mastercard Travel Pass Membership
There are so many benefits to this card, especially for travellers.
BMO Cashback World Elite Mastercard
The BMO Cashback World Elite Mastercard is one of the best grocery cash-back credit cards out there right now. In 2022, it was actually the 2022 winner of the Milesopedia Best Mastercard Cashback Card for Groceries, among other rewards. However, it does have some pretty steep requirements. You must have a personal annual income of at least $80,000 per year, of an annual household income of at least $150,000. There’s also an annual fee of $120 that’s waived for your first year. The purchase interest rate on this card is 20.99%, and the cash advance rate is 23.99% (21.99% for Quebec residents). A credit check will be required as well. While it doesn’t specify any credit requirements, having good to excellent credit is normally required,
With this card, you can earn 5% cash back on groceries, 4% cash back on transit, 3% on gas and 2% on recurring bill payments. For all other purchases, you earn 1% cashback, plus there are no limits on the rewards that you can earn. There’s no set time when you can redeem your cash back either, you can do that whenever you like. As a bonus offer, you can earn up to 10% cash back in the first 3 months of having the card.
Some other benefits included with this card are:
- Roadside Assistance
- Travel Insurance
- Emergency and Medical Insurance
- Complimentary Mastercard Travel Pass Membership
- 25% off National and Alamo car rentals
- Travel Rewards Cash Back Offers on eligible travel purchases
- Complimentary Boingo Account
- Additional Cardholder for $50 to earn more rewards
If you’re an active Costco shopper, whether you spend with Costco Travel or Costco Wholesale, you can earn some amazing cash back rewards.
BMO Airmiles World Elite Mastercard
If you’re a big air miles collector, then the BMO Air Miles World Elite Mastercard might be for you. As a new cardholder, you can get up to 2,000 points and the first annual fee of $120 waived. Plus, they’re the 2022 and 2023 recipient of the credit card genius Best Airmiles Credit Card Award. That said, there is an income restriction of $80,000 per year for individuals and $150,000 per year for a household income. The purchase rate is 20.99%, and the cash advance rate is 23.99% (21.99% for Quebec residents).
The rewards you earn with this card are:
- 3x the miles for every $12 spent with Airmiles partners
- 2x the miles at eligible grocery stores
- 25% off one air miles flight per year
- Double ShellGo+ miles on eligible gas purchases and in the convenience stores
Plus, you get all the same extras as the BMO Cashback World Mastercard
PC Financial World Elite Mastercard
The PC Financial World Elite Mastercard is one of 3 PC Financial credit cards. With this card, you can earn free groceries at most Loblaws stores. If you make shopping trips at one of those stores as well as Costco, then this may be the card for you. The income requirement is $80,000 annually for personal income or a combined household income of $150,000. It’s also subject to credit approval, and there may be other eligibility criteria to consider as well. The purchase rate on this card is 21.99%, and the cash advance rate is 22.97% (21.97%). All new purchases have an interest-free grace period of 21 days. If you don’t meet the criteria for this card, there are other PC Mastercards that have less.
The rewards structure for this card is:
- 30 points per $1 at No Frills, Superstore, Independent and Wholesale Club
- 45 points per dollar at Shoppers Drug Mart
- 30 points per litre at Esso Mobil
- 30 points per $1 on PC Travel
- 10 points per $1 on everyday spending
With this card you also get:
- Travel and Emergency Medical Insurance
- Car Rental Insurance
- Identity Theft Assistant Service
- Concierge Service
You only need a minimum of 10,000 points in order to redeem. 10,000 points is equal to $10. You can also redeem 4000 points at Esso locations for 10 cents off per litre.
Brim World Elite Mastercard
Another top-rated credit card is the Brim World Elite Mastercard. This card is through Brim Financial, which is currently the only Fintech company in North America with a license to issue credit cards. They were also awarded the 2022 Best Challenger Bank Credit Card & Platform by credit card genius. Their parent company is the Laurentian Bank. With this card, you can earn up to 30% back in points and access ultimate rewards. Plus, since it’s a fully online bank, once you’re approved for your credit card, it’ll be sent directly to your digital wallet so it can be used immediately. You don’t have to wait until you receive the card.
The specifics of this card are:
- $0 annual fee ($199 after the first year)
- 2 points for every $1 (up to $25,000 annually spent)
- Open rewards
- 0% foreign transaction fees
- Free global wifi
- Free app with real-time notifications
- $50 per additional card
Tangerine Money-Back Mastercard
The Tangerine Money-Back Mastercard is also known for its great rewards. There’s no annual fee, the interest rate is 19.95%, and you get monthly, unlimited money-back rewards. The eligibility requirements are that you must have a minimum annual income of $12,000 per month or more, no bankruptcies in the last 7 years, be a permanent resident, and the age of majority where you live.
With this card, you can earn 2% cash back in 2 categories of your choice. For all other purchases, you will earn 0.50%. If you get your rewards set up for direct deposit into your Tangerine savings account, you can earn an extra money back category, allowing you 3 2% categories instead of 2. Who doesn’t want bonus categories? These rewards are paid out monthly, and you also have the choice to apply them directly to your credit card balance. A bonus is that once you’re approved for this card, it can automatically be added to your mobile wallet while you wait for the physical card to arrive.
Your choices for the 2% money back categories:
- Hotels and Motels
- Recurring Bill Payments
- Drug Store
- Home Improvement
- Public Transportation and Parking
While Costco accepts Mastercard in Canada, Costco Wholesale in the US accepts Visa. Specifically, Costco in the US has partnered with CITI for the Citi Costco Anywhere Visa card. With this card, you can earn cash back on all your purchases, and it’s exclusive to Costco members only, just like the CIBC Costco Mastercard.
Another card by Citi is the Double Cash Card. Instead of a Visa by Citi, it’s a Mastercard. This is also only available in the US, but it can’t be used at Costco warehouses. That said, it can be used online at Costco.com or at Costco in Canada if you’re here from the US.
Using Your Costco Mastercard in the US
Alternatively, you can’t use your Costco Mastercard from Canada in the US. Costco warehouses in the US only accept Visa credit cards.
Payment Methods Accepted in the US and Canada
Costco Wholesale Canada
|Method of Payment||In Warehouse||Gas Stations||Online|
|Costco Shop Card||✔||✔||✔|
Costco Wholesale US
|Method of Payment||In Warehouse||Gas Stations||Online|
|Costco Shop Card||✔||✔||✔|
Costco Mastercard vs. Other Mastercards
When we look at the Costco CIBC Mastercard versus other Mastercards, we can see that there are plenty out there that give the Costco credit card a run for its money. Really, one of the largest perks of the Costco credit card is that it also doubles as your Costco card. Plus, you can earn some extra Costco rewards if you purchase with Costco Travel and you have an executive membership.
When we look strictly at the rewards, though, there are a few cards that can give you more rewards than the Costco credit card. These are the Brim World Elite Mastercard and the BMO Cashback World Elite Mastercard. The Brim card gives you 2% cash back on all purchases up to $25,0000, and the BMO gives 5% cash back on grocery purchases, as well as some great rewards in the other categories they offer as well.
While the CIBC Costco Mastercard is a pretty good credit card, it isn’t the only option out there for Costco shoppers. Before you make a decision, take a look at some of the other cards and see which one will fit your lifestyle the best.
What if You Had a Former Costco Credit Card?
In 2022, Capital One and Costo ended their partnership, and they then partnered with CIBC as their new credit card issuer. Before that, as a Costco member, you could get American Express benefits. What happens when Costco’s partnership changes? What happened to those who had the Capital One credit card? Well, they then received the new CIBC Costco Membership without having to reapply and spending limits stayed the same. In some cases, members were unable to get the CIBC credit card, but this was rare. No credit check was performed either, so no credit scores were affected.
How to Get the CIBC Costco Mastercard
Applying to get the CIBC Costco Mastercard is actually pretty simple. You can do so in your local Costco Wholesale. You will find out the decision on your application right away, and all you need to do is wait for your card in the mail. Alternatively, you can skip going to a physical Costco store and apply online at Costco.ca or through CIBC; all you need to do is prove that you have a paid Costco membership. Once you’ve been informed of the decision, you just need to wait for your card. Either way, you decide to apply, the process is fairly fast and straightforward.
When it comes to deciding which credit card is best for you, it’s important to consider what you’re using the credit card for. As a Costco member, a grocery or travel-focused credit card will be your best bet if you intend to use the card at Costco. There are plenty of cards to choose from, but you need to make sure it’s a Mastercard since Costco Canada doesn’t accept Visa.
While the CIBC Mastercard may not be the ideal choice for all Costco members, it’s actually a pretty good credit card. While there aren’t specific rewards for shopping at Costco, there are some good rewards for Costco.ca, especially for those with Executive Memberships. Your cashback is distributed to you annually with a rewards certificate (unlike other credit card issuers who issue a statement credit) which can only be redeemed at Costco and is great for those who are frequent Costco shoppers. That said, though, no matter which Mastercard you choose to go with, you can earn some pretty great rewards.
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