Tiger Brokers

Here's How to Earn 3% in Credit Card Cash Back at Costco Warehouses

Motley Fool
29 Oct 2024

KEY POINTS

  • Costco only accepts Visa credit cards, making it difficult to maximize your cash back. 
  • For readers of The Ascent, the Chase Freedom Unlimited® can earn 3% cash back at Costco on up to $20,000 spent in the first year. 
  • If you want a Visa card with a $900 sign-up bonus, check out the Ink Business Unlimited® Credit Card. 

When people ask me about the best credit card to use at Costco, I usually say two things: One, any new Visa credit card (Costco only takes Visa) with an ongoing sign-up bonus, or a credit card that earns a flat 2% back on everyday purchases. Since sign-up bonuses can only be obtained once, a card that earns 2% back is usually the more sustainable option. 

However, there is one credit card that combines features of both options. It's a credit card that many people overlook, but its base earning rate is currently the highest to use for Costco warehouse purchases. It's the Chase Freedom Unlimited®, and if you haven't considered this card yet, here's why you should. 

Ratings Methodology

Chase Freedom Unlimited®

Apply Now for Chase Freedom Unlimited®

On Chase's Secure Website.

Rating image, 5.00 out of 5 stars.
5.00/5Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.00 out of 5 stars.
5.00/5Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Credit Score:Circle with letter I in it. Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Apply Now for Chase Freedom Unlimited®

On Chase's Secure Website.

Credit ScoreCircle with letter I in it. Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Good/Excellent (670-850)

Intro APRCircle with letter I in it. 0% Intro APR on Purchases and Balance Transfers for 15 months

Purchases: 0% Intro APR on Purchases, 15 months

Balance Transfers: 0% Intro APR on Balance Transfers, 15 months

Regular APR

19.99% - 28.74% Variable

RewardsCircle with letter I in it. Enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases

1.5% - 5% cash back

Annual Fee Circle with letter I in it. N/A

$0

Welcome OfferCircle with letter I in it. Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That's 6.5% on travel purchased through Chase Travel℠, 4.5% on dining and drugstores, and 3% on all other purchases.

Up to $300 cash back

  • A cash back card that has it all with unlimited 1.5% - 5% cash back rates and an excellent 0% intro APR offer. There's also an innovative sign-up bonus worth up to $300 cash back. With the bonus, you’ll earn 4.5% cash back on dining and drugstores, 6.5% on travel booked through Chase Travel, and 3% on all other purchases (on up to $20,000 spent in the first year). After the bonus, you’ll still earn the regular cash back rates on every purchase.

    • Innovative sign-up bonus
    • Purchase and travel protections
    • Robust rewards program
    • Great intro APR
    • No annual fee
    • Limited bonus opportunities on everyday spending
    • Foreign transaction fee
    • INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
    • Enjoy 6.5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
    • After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
    • No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
    • Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 19.99% - 28.74%.
    • No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
    • Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
    • Member FDIC

A credit card that could earn up to $300 at Costco as a welcome bonus 

Whenever I write about the Chase Freedom Unlimited, I always feel as if there's a traffic jam of words in my head: There are so many different features to talk about, it's hard to pick the best one to start with. 

But let's start with the welcome bonus, because it's the most pertinent for Costco members. This Visa card already earns a base rate of 1.5% cash back, including at Costco. But as a welcome offer for readers of The Ascent, it will earn an extra 1.5% on everything you buy on up to $20,000 spent for the first year. That's 3% back at Costco and an extra $300 in cash back. If you can already see where I'm going with this, click here to get this sign-up offer exclusively through The Ascent. 

As far as how the Chase Freedom Unlimited earns cash back, here's what you can expect: 

  • 5% on travel purchased through Chase Travel
  • 5% on Lyft rides through March 2025
  • 3% on dining at restaurants, including takeout and eligible delivery services
  • 3% at drugstores
  • 1.5% on other purchases

Again, pay attention to that last one. As a base rate, the card already earns 1.5% on purchases made at Costco warehouses. The extra 1.5% cash back on up to $20,000 spent adds up to 3% back at Costco -- currently the best flat rate of any credit card we've heard about.

Wait! I already have this credit card. What card should I use? 

If you already have the Chase Freedom Unlimited and you've gotten the sign-up bonus, the card's 1.5% in cash back is still good. However, 1.5% in cash back is not the best option available. 

For you, I'd recommend -- drum roll -- the Costco Anywhere Visa® Card by Citi. Yep, no big surprise there. This card has no annual fee, earns 2% cash back at Costco purchases, plus 3% cash back on restaurants and travel spending and 4% on eligible gas and EV charging purchases (on up to $7,000 per year). 

Plus, if you're a Costco Executive member, you can combine this credit card with the 2% in cash back you already earn. That would give you 4% in cash back on regular purchases and 5% back on Costco Travel. 

Click here to learn more and start earning at least 2% back on your Costco purchases.

Finally, if you want to earn a big sign-up bonus on a Visa credit card, check out the Ink Business Unlimited® Credit Card. This credit card is offering a massive $900 welcome offer when you spend $6,000 in the first 3 months. The card also earns an unlimited 1.5% cash back on every purchase, making it a decent card to use at Costco after reaching the bonus. Compare it with other great Visa credit cards to see which ones offer you the best combinations of perks. 

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10