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UPDATE: The offer for the British Airways card in this post has expired. But check Hot Deals for the latest offers!
More news about the new Citi Costco Visa! Citi has released full details of the new card. Folks with an existing card will receive it in the mail this May. And can begin using it on June 20, 2016.
I’ll tell you what I like about this card. And what could be a deal-breaker for some!
I’ll share what we know so far!
What’s Going On?
I shared preliminary details about the Citi Costco Visa card. And let you know Costco will begin accepting it from June 20, 2016.
Folks with an existing AMEX Costco card will automatically receive a new Citi Costco Visa by mail in May 2016.
And, they’ll be happy to know the new card has even better cash back categories!
The new Citi Costco Visa will earn:
- 4% cash back on on the 1st $7,000 of purchases each annual reward period (1% thereafter) of gasoline at Costco and gas stations worldwide (excluding superstores, supermarkets, convenience stores, and warehouse clubs other than Costco)
- 3% cash back at restaurants & bars worldwide
- 3% cash back for eligible travel purchases including airfare, hotel stays (excluding timeshares, banquets, and events), car rentals, and purchases from Costco Travel
- 2% cash back on purchases at Costco and Costco.com
- 1% cash back on all other eligible purchases
The card will have NO annual fee if you have a paid Costco membership. All of your current cash back rewards will transfer automatically. And there are no steps you need to take to get a new card, other than look out for it in the mail.
Citi will NOT pull a new credit report as part of the transfer process. And you can begin using the card on June 20, 2016. That’s the same day Costco will begin accepting only Visa cards for payment in-store.
Citi doesn’t say if the new card will have foreign transaction fees or not. But I’ll let you know when I get new information!
This card will also be eligible for Citi Price Rewind.
I Don’t Like How You Receive Cash Back
This card works differently in that you can’t redeem your cash back whenever you’d like, or when you meet a certain threshold.
Instead, you’ll receive your cash back in the form of a reward coupon once a year. You can use the coupon for merchandise or redeem it for cash back or merchandise at US Costco Warehouses, including those in Puerto Rico.
The coupon will be sent with your February billing statement and expires on December 31st of the year issued.
Also keep in mind that if you cancel your Costco membership (or the card) before you receive the cash back reward, you’ll lose everything you’ve earned so far that year. Citi says:
You must maintain your Costco Membership to receive and redeem the reward coupon.
Account Closure: If we close your Card Account, you will no longer be able to earn or redeem your Costco Cash Rewards, and you will forfeit any accumulated Costco Cash Rewards. If you close or convert your Card Account prior to receiving the reward coupon in your February billing statement, any earned Costco Cash Rewards will be forfeited.
So this card locks you into keeping a Costco membership if you want to earn rewards! That could be a problem for folks who aren’t sure if they want to renew for another year. Or if you move far away from Costco stores.
The Sam’s Club cash back credit card works in a similar way.
There Are Better Cash Back Cards
If you don’t want to commit to a Costco membership, or prefer redeeming your cash back when you want, there are plenty of other good cash back cards to consider.
And many don’t have annual fees, including:
- Blue Cash Everyday® Card from American Express
- SimplyCash® Business Card from American Express
- Chase Freedom
- Chase Freedom Unlimited
- Chase Ink Cash
- Citi Double Cash
- Discover it
- Fidelity Rewards Visa Signature Card (US Bank)
Here are the minimum redemption amounts for many popular cash back cards:
|Credit Card||Minimum Redemption Requirement for Cash Back|
|Blue Cash Everyday® Card from American Express||$25|
|Blue Cash Preferred® Card from American Express||$25|
|AMEX Membership Rewards||$6 for a statement credit|
|SimplyCash® Business Card from American Express||1 cent|
|Bankamericard Cash Rewards||$25|
|Bankamericard Travel Rewards||$25|
|Barclaycard Arrival||$100 for travel or $25 for non-travel|
|Barclaycard Arrival Plus||$100 for travel or $25 for non-travel|
|Capital One Quicksilver||1 cent|
|Capital One Spark Cash Business||1 cent|
|Capital One Venture||1 cent|
|Capital One Venture One||1 cent|
|Chase Ultimate Rewards||$20|
|Citi Dividend (closed to applications)||$50|
|Citi Double Cash||$25|
|Citi ThankYou||$50 for check
$10 for statement credits
|Discover It||1 cent|
|US Bank Cash+||1 cent|
|US Bank FlexPerks Business Edge Travel Rewards Visa||$50|
|US Bank FlexPerks Travel Rewards Visa||$50|
|US Bank FlexPerks Travel Rewards AMEX||$50|
I’m more excited about the new Chase Freedom Unlimited card, which will soon be available online. It earns 1.5% cash back (1.5 Chase Ultimate rewards points per $1) everywhere with no limit.
So it’s a better card for non-bonus category spending. And if you have the Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold (no longer offered), your Chase Ultimate Rewards points can be worth much more when you transfer them to travel partners like United Airlines and Hyatt.
Instead of Using the Costco Visa for 1% Cash Back or 2% at Costco, Consider This
I’d never use this card for 1% cash back or 2% back at Costco. I’d rather use my Chase Freedom or Chase Sapphire Preferred to earn 1X points (1% cash back) because I can redeem starting at $20, whenever I want my money.
Not that I’d redeem for cash back from these cards anyway! That’s because I get more than 1 cent per point value by transferring Chase Ultimate Rewards points to travel partners.
And I’d rather put Costco spending on a new Visa card I’m trying to meet minimum spending requirements on.
You’re better off putting that spending on a new card to earn 50,000 Chase Ultimate Rewards points, a total of 100,000 British Airways Avios points, 80,000 Marriott points, or 2 weekend nights at almost any Hilton!
What Else Should You Know About This Card?
Right now, the card is NOT open to new applicants. I don’t know exactly when it will be publicly available. But as soon as I find out, I’ll let you know!
Similar cash back cards with no annual fees, like the Fidelity Visa earn 2% back on all purchases. Whereas the the Citi Costco Visa will earn 1% cash back on purchases which aren’t in a bonus category.
But the Citi Costco Visa’s cash back categories for gas, travel, and dining are more than a regular 2% cash back card. These are popular spending categories for most folks. So it may be worth getting the new card once it becomes available, depending on your spending patterns.
That said, I still like the Chase Sapphire Preferred for travel and dining, because it earns 2X Chase Ultimate Rewards points (2% cash back) in these categories. And by transferring your points to airline and hotel partners, you can come out well ahead by redeeming for awards worth more than 2 cents per point.
For example, you’ll likely get a better value transferring Chase Ultimate Rewards points to:
- British Airways for short, expensive flights on American Airlines
- Hyatt for award stays at expensive resorts
- Southwest for award flights for 2 with the Southwest Companion Pass
- United Airlines for Business Class tickets
I like that there’s no annual fee on the card. Because it will be free to keep for the long-haul as long as you maintain for Costco membership. And that could help boost your credit score.
However, you can’t keep the card without a Costco membership. So if you discontinue your membership, Citi will automatically cancel your Citi Costco Visa.
Along with a new cash back card from Chase and several other cash back cards (many with no annual fee), you have lots of options for credit cards to use at Costco. Including Visa cards with big sign-up bonuses, because you can meet the minimum spending requirements at Costco to earn Big Travel with Small Money!
And of course, you can still purchase Costco cash cards up to $1,000 on their website with any major credit card.
Folks with an AMEX Costco card will be automatically converted to the new Citi Costco Visa. You’ll receive your new card in the mail in May 2016. And you can begin using it at Costco and for regular spending beginning June 20, 2016.
That’s the same day Costco will begin accepting only Visa cards for payment in-store.
The new card is NOT available for new sign-ups yet.
The cash back categories are better than previously reported! You’ll earn 4% cash back on gas purchases, 3% cash back on eligible travel and restaurants, and 2% cash back at Costco and Costco.com. For other purchases, you’ll get 1% cash back with no cap.
But you can do better by meeting the minimum spending requirements on other Visa cards like the Chase Sapphire Preferred or Chase Marriott Rewards Premier at Costco to get Big Travel with Small Money.
When the Citi Costco Visa card is available publicly, I’ll let you know!