Card Review: Citi Costco Anywhere Visa® Credit Card
The American Express monopoly over the Costco Credit Cards is over, and the torch has been passed. On June 20, 2016, the licensing agreement for Costco Credit Cards transferred to Citibank. Costco, the exclusive warehouse style shopping...
The American Express monopoly over the Costco Credit Cards is over, and the torch has been passed. On June 20, 2016, the licensing agreement for Costco Credit Cards transferred to Citibank. Costco, the exclusive warehouse style shopping chain, converted all their American Express Costco cards in favor of the new Costco Anywhere Visa® Card by Citi. But is it a good credit card? What are the perks of having such a card, other than the ability to use it at Costco? Let’s answer those burning questions as we look at some of the features and benefits of the Costco Anywhere Visa® Card by Citi.
Do I Lose My Rewards From My American Express Costco Card? The short answer is no, you don’t lose your cash rewards from your previous American Express Costco Card. Every holder of the AmEx card had their account converted when the licensing agreement was transferred. This means that rewards that were not previously redeemed transfer over to your new account. But it is important to keep in mind that this only applies to the cash back rewards. Member rewards, which are different, are not transferrable.
Is There an Annual Fee? One thing to keep in mind with the Costco Anywhere Visa® is that it is exclusively for Costco members. There is no annual fee on the card, but there is an annual fee to be a Costco member. $55 gets you an annual membership or a $110 fee gets you executive status. This is important to keep in mind. This fee will get billed to your Costco Anywhere Visa® on the anniversary of your membership. But interestingly enough the Anywhere Visa® (aptly titled) does offer benefits beyond just your visits to Costco.
What Are The Rewards? It’s happened to most Costco members at some point: you’re in the cashier line and forgot that Costco doesn’t take certain cards. If the Costco Anywhere Visa® is in your wallet you’ll never have to worry about that again. And, being that it is a Visa, it is more widely accepted than the former American Express card. What’s best is that not only can you use it everywhere Visa is accepted, you can earn rewards for doing so. The Anywhere Visa is quite simply a cash back rewards card. As we take a look at how that cash back is earned, just remember 4,3,2,1!
- 4% cash back on eligible gas purchases – Notice the word “eligible”. It’s complicated how these transactions are coded, meaning Citi has tried to make gas stations attached to convenience stores (Circle K, AmPm, etc.) ineligible for this perk. But rest easy because Citi can’t tell the difference between a gas station attached to a convenience store from just a regular gas station. So in all likelihood, the 4% cash back will hold up at the pump.
- 3% cash back on restaurants and eligible travel purchases – There’s that word again, “eligible.” Costco will not honor the 3% cash back on certain restaurants, bakeries, and bars. Again it comes down to how the transaction is coded. Just keep in mind that Costco is doing this because they want you to buy just about everything at Costco. So if you buy a sandwich at another warehouse club, grocery store, or bakery don’t expect the 3% back; you can get that sandwich at Costco.
For travel, rewards expect the 3% cash back on eligible airfare, cruise lines, car rentals, travel agencies, and of course Costco Travel. The word “eligible” pops its head into this discussion again, but the terms do not reveal what is and isn’t eligible. This is slightly disconcerting and should cause you to be wary about receiving rewards for your travel purchases. Rest assured you will get your 3% back if you use Costco Travel.
- 2% cash back on all other purchases made at Costco or Costco.com – Simple enough right? As long as it’s not Costco gas or Costco Travel you’ll receive 2% back on all of your visits to Costco.
- 1% cash back on everything else – Again very simple. The non-eligible purchases made for gas, restaurants, and travel purchases will also fall into this category. So no matter what, if you use the Costco Anywhere Visa you will receive cash back.
How Do I Redeem My Cash Back? Pay attention to this section or you might end up with nothing at the end of the year. Whether you are signed up for paper, or paperless statements a rewards coupon will be issued to you via US Mail in the month of February. The amount of the coupon will be an accumulation of cash back earned from January to December of the previous year. WARNING! This coupon is not cash and must be redeemed by the December 31st of the same year (that leaves you roughly 10 months). If it is not redeemed by December 31st you will forfeit your cash back.
To redeem the rewards coupon simply bring it with you to a Costco warehouse store. It cannot be redeemed online. The coupon can then be exchanged for Costco merchandise or they will cut you a check for the amount. You can also do a combination of both of these options. Just make sure that your Costco membership is up to date when you bring it in. If you canceled your membership you forfeit your rewards. If you are thinking about canceling your Costco membership just make sure and wait until after February.
What Are The Other Benefits? If only there was a way to take out a small loan at a decent interest rate to buy your next TV or surround sound system. Well, now you have it! The Costco Anywhere Visa® starts with an introductory APR of 0% on purchases (not balance transfers) for the first seven months of your account opening. This is fantastic news! If you’re in the market for some expensive home electronics or otherwise pricey merchandise you now have an interest free loan to make the purchase.
Apply for the card, buy the TV, and then pay it off in installments without accumulating any interest. That’s a pretty sweet deal, right?! After that, the card defaults to 15.99% (on purchases only).
Is There Anything Else I Should Know? The Anywhere Visa certainly has some amazing perks, but it comes up short in other areas when compared to other credit cards. Let’s take a look at some of those features:
- Penalties – The Anywhere Visa appears to be a very unforgiving card. A penalty interest rate can be enacted after just one late payment, or if a payment is returned. That will hike your interest up to 29.99%. Ouch! Do not let this happen! What’s worse is if you make this mistake in the first seven months you could lose your introductory interest rate. Imagine going from 0% to 29.99%! No thank you. Oh yeah, and this penalty rate could possibly apply indefinitely. Yuck!
- Fees – The fees on this card are the industry standard, meaning they offer no real benefit. Balance Transfers are hit with the standard 3% or $5 (whichever is greater) fee and are given the same interest rate as purchases. Foreign transaction fees are 3% (unless you find yourself at an “eligible” Costco store in another country). Late payment fees are $37 on top of the danger of having your balance converted to the penalty interest rate. Cash advances are another no, no as you will be hit with a 5% or $10 (whichever is greater) fee and see an interest rate of 25.99%
So Who Should Get the Citi Costco Anywhere Visa? Of course, only Costco members are eligible to even apply for this card. And just being a Costco member does not guarantee you’ll be approved (subject to credit approval). Basically, this card is for the responsible card holder who enjoys cash back benefits. You don’t even have to be a frequent Costco shopper to enjoy the benefits. The 4,3,2,1 actually holds up better than most cash back credit cards. However, apply for a different card if you’re in search of a good balance transfer offer, or want a card that offers no foreign transaction fees.