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Few retailers inspire such strong customer loyalty as Costco (one couple even got married there). But is it smart for Costco members to sign up for the Costco Anywhere Visa® Card by Citi to maximize their savings? After all, store credit cards are not always the best option for consumers as they sometimes have less than stellar terms and rewards.
Select took a deeper look at the Costco Anywhere Visa Card's benefits and drawbacks to help you decide whether it is right for you. Here are five important things you should know about the card.
On Citi's secure site
4% cash back on eligible gas and EV charging purchases for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all other purchases from Costco and Costco.com; 1% cash back on all other purchases
No current offer
$0, Costco membership required
N/A for purchases and balance transfers
20.49% variable
5% of each balance transfer; $5 minimum
None
Excellent
See rates and fees. Terms apply.
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While experts usually don't recommend signing up for a store credit card, the Costco Anywhere Visa Card is an exception, thanks in part to its tiered rewards program that benefits gas guzzlers, foodies and frequent travelers.
Here are the rewards you earn with the Costco Anywhere Visa:
Unfortunately, the card doesn't currently offer a welcome bonus, so you can't earn increased rewards during your first few months of account opening.
On Wells Fargo's secure site
Unlimited 2% cash rewards on purchases
Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months
$0
0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate
20.24%, 25.24%, or 29.99% Variable APR on purchases and balance transfers
3% intro for 120 days from account opening then BT fee of up to 5%, min: $5
Suggested reading:3%
Excellent/Good
See rates and fees, terms apply.
The cashback you earn with the Costco Anywhere Visa Card is provided via an annual reward certificate once your February billing statement closes. To redeem the certificate for a check or merchandise, you have to head to a U.S. Costco warehouse. That may come as an unexpected surprise if you didn't read the fine print as most other credit cards allow you to redeem rewards online, typically within one billing cycle of earning them.
Learn more about how to redeem Costco credit card rewards.
While the card itself has no annual fee, cardholders must have a paid Costco membership, which starts at $60 for Gold Star and Business levels, then doubles in price to $120 for Gold Star Executive and Business Executive members.
If you're already a Costco member, this isn't really an added cost. But if you're considering this card and already have a membership with BJ's or Sam's Club, you may think twice about adding the cost of another warehouse club membership.
Learn more: What credit cards does Costco accept?
Aside from the solid 3% return on travel purchases, frequent travelers will benefit from the various perks provided by the Costco Anywhere Visa Card, which include travel and emergency assistance, worldwide travel accident insurance and worldwide car rental insurance.
Additionally, there are no foreign transaction fees, so purchases made outside the U.S. won't incur the typical 3% charge. This can add up to substantial savings if you regularly travel abroad.
For more details on the card's benefits and perks, see our full review of the Costco Anywhere Visa Card.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Answers to frequently asked questions about debit cards.
A debit card looks like a credit card but works like an electronic check. Why? Because the payment is deducted directly from a checking or savings account. If you use a debit card at a retail store, you or the cashier can run your card through a scanner that enables your financial institution to verify electronically that the funds are available and approve the transaction. Most debit cards also can be used to withdraw cash at ATMs (automated teller machines).
For many people, it is more convenient to carry a small, plastic card instead of a bulky checkbook or a large amount of cash. Using a debit card is also easier and faster than writing a check. It's a good way to pay for purchases without having to pay interest, as you would if using a credit card with an outstanding balance. You can even use your debit card to get cash when you make purchases at a store.
There may be fees for using your debit card. Examples: Some banks charge a fee if you enter a PIN (Personal Identification Number) to conduct a transaction instead of signing your name. You may trigger a fee if you overdraw your account using your debit card, just as you would if you "bounced" a check. Or, there could be a charge if you use your debit card as an ATM card at a machine that is not operated by your financial institution. As with other bank products, your financial institution must provide disclosures explaining the possible fees associated with a debit card. Be sure to read the disclosures to avoid an unexpected fee.
As with similar financial products, rewards-linked debit cards are designed to encourage people to use a certain bank and its services. Before opening a new account or changing banks just to get a different perk, study the fine print. Start by reading the disclosures that explain the account terms and fees to understand the potential benefits as well as the costs.
First, because the payments are electronic, they are deducted from accounts more quickly than when using a paper check. Often, a debit card purchase is posted within 24 hours instead of days, as may be the case with a paper check. That means there would be little time to make a deposit to cover a purchase, if necessary. In addition, even though a transaction was approved, you may overdraw your account because the bank won't know what other withdrawals you have made that day until it settles all transactions later that day.
Or, suppose you don't realize you have only $100 in your bank account and you want to use your debit card to buy a $200 item. Depending on the terms of your account or the rules of the card network, the bank might approve the $200 purchase as a convenience, but it also might assess an overdraft fee for that transaction and subsequent ones until you make a sufficient deposit.
Yes, in certain circumstances, merchants can take these steps as protection against fraud, errors or other losses. One common situation involves a hotel putting a hold on a certain amount when you use a debit card (or credit card) to reserve a room. Another example is when you use your debit card at the gas pump. Typically, the gas station will create two transactions — the first to get approval from your bank for an estimated purchase amount (let's say $50) when you swipe your card before pumping gas, the second for the actual charges when you're done. Until the first ($50) transaction is cancelled by the bank, usually within 48 hours, you wouldn't have access to that amount in your account.
It depends. Because funds are deducted from your account very quickly, don't expect to have the option to stop payment or obtain a refund. If the transaction cannot be cancelled, you may be able to work out other arrangements with the store. For example, if you return an item to a merchant and you're not able to get a refund, you instead may qualify for store credit or a gift card.
"If you're concerned that the merchant might not deliver what is promised, you might consider using a credit card instead of a debit card," says Janet Kincaid, FDIC Senior Consumer Affairs Officer. "That's because the consumer protections are stronger for credit cards when it comes to returning damaged merchandise." She noted, for example, that the Fair Credit Billing Act, which applies to credit cards but not debit cards, gives you the ability, under certain circumstances, to withhold payment on defective goods until the problem has been corrected.
Yes, it could. Examples: If you use a PIN at a merchant's sales counter, you also may be able to get cash back, and that can save you a trip to the ATM. However, be aware that some financial institutions charge consumers a fee for a PIN-based transaction. There also may be differences in how quickly the transaction is posted to your account, depending on how your bank processes PIN vs. signature debits.
Also, here's how to select each option. If you want to sign for a debit card transaction, you generally swipe your card through the reader and choose "credit" — even though you are authorizing a debit (withdrawal) from your account, not a credit card transaction. To use your PIN instead of signing, select "debit."
Protect your debit card as well as the account number, expiration date, security code on the back, and the PIN. "Even if you never lose possession of your card, someone who learns your account number, security code and PIN may be able to use that information to access your account and create counterfeit cards," said Aurelia Cardamone, an FDIC Senior Technology Specialist.
While in many cases you are not responsible for unauthorized transactions (see federal protections described later), it can be a hassle resolving the situation. Here's how to avoid becoming a victim:
The federal Electronic Fund Transfer Act (EFTA) protects you from errors, loss or theft of your debit card. However, unlike the Truth in Lending Act protections for credit cards, which cap a consumer's liability for unauthorized transactions at $50, the law limits liability to $50 if the debit cardholder notifies the bank within two business days after discovering the theft. If you don't notify your bank within those two days, you could lose up to $500, or perhaps more. In the worst-case scenario — if you receive a bank statement that includes an unauthorized debit-card withdrawal and you wait more than 60 days to alert your bank — you could be liable for any amounts from transactions made after that 60-day period.
The good news is that many banks don't hold a consumer responsible for unauthorized transactions if he or she notifies the institution in a timely fashion. But remember that with a debit card, the money tapped by the thief has already been taken out of your account.
Under the EFTA, a bank has 10 business days to investigate the matter (20 business days if your account is new) and report back to you with its results. If the bank needs additional time, it may, under certain circumstances, temporarily give you some or all of the disputed amount until it finishes its investigation. Generally, a bank is allowed up to 45 days of additional investigation time (90 days for certain transactions). "But until the dispute is resolved," said Creamean, "you should be prepared to pay your mortgage, car payment, credit card bill and any other obligations that may come due." Also, she said, if the bank's investigation finds there was no error, theft or loss, it can take back the money it put into your account, after notifying you.
Source: FDIC Consumer News
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