Is Costco's Anywhere Visa Card Actually Worth The Cost?

Given that consumers can only spend a certain amount of money organically every month, smart shoppers will consider which credit card(s) will return the most value in terms of rewards. Typically, those rewards are in the form of cash back, airline miles, hotel loyalty points, or gift certificates. In that regard, many store credit cards fall short by only offering value when used at the particular store they're affiliated with. Worse still, some store credit cards can't be used outside of that retailer.

However, like its name implies, Costco's Anywhere Visa offered by Citi tries to break the mold of typical store-branded credit cards by offering user benefits at many other purchase points besides the chain of warehouse stores itself. Though to be fair, many consumers love to shop at Costco for their inexpensive rotisserie chickens, the world's largest puzzle, or a 72-pound wheel of cheese. Indeed, the Anywhere Visa card rewards any in-store or online Costco purchases at a rate of 2% per dollar spent but where it really excels over typical store-branded cards is in its usefulness outside of just Costco locations.

A Costco membership is required

First things first, there's no lucrative welcome bonus offer for opening up a new account. However, you can look forward to earning a healthy 4% cash back on all fuel and EV charging purchases, up to $7,000 spent per year after which the earnings rate drops to 1%. That's a particularly strong benefit considering that 4% cash back on gas isn't only generous but the perk isn't limited to a certain time period, like for one quarter a year, as is the case with some other rewards credit cards.

Besides fuel, another spending category group that rewards cardholders generously is restaurant dining and eligible travel purchases, both of which earn 3% cash back. As previously mentioned, Costco purchases, meanwhile, earn 2% cash back, while all other purchases earn 1% cash back.

While there's no annual fee to try and waive with the Costco Anywhere Visa card, cardholders do need to be active Costco members. Joining the warehouse club starts at $60 per year for a Gold Star membership and $120 per year for an Executive-level membership. Most consumers showing an interest in this card will likely already have a membership, but those who employ workarounds to shop at Costco without a membership will need to factor in the expense of becoming an official member in their cost/benefit analysis of this credit card.

Redeeming the card's rewards

Besides some small hurdles, such as the lack of a welcome bonus and being required to join Costco, a slightly more significant downside to Costco's Anywhere Visa card is the way rewards are paid out. Unlike many credit cards where rewards can be redeemed any time, the Costco Anywhere Visa card requires that cardholders wait until February each year to collect the prior year's rewards.

Furthermore, the cash-back rewards are actually paid out in the form of a certificate that you must bring to a brick-and-mortar Costco to redeem, not online. Once at the store, you'll have the option to convert the certificate to cash — which could be in the form of a check or an electronic transfer — or purchase Costco merchandise instead. Recently, some cardholders with large rewards balances have reported being offered direct deposit of funds by Citi without visiting a Costco store, though the exact details are still somewhat murky.

Given that some rewards credit cards featuring high-earning multiples for grocery store purchases specifically exclude Costco, the Anywhere Visa card with its 2x earnings can be an asset for frequent Costco shoppers and is generous enough in other categories like gas, travel, and restaurants, that you will actually want to use it outside the warehouse giant. Finally, did you know that Costco physical stores only accept Visa cards from customers wishing to pay by credit card? It doesn't specifically need to be the Anywhere Visa, but you do need a Visa-backed card to pay with credit. Mastercard, Discover, and American Express need not apply.