American Express Costco Card Review - True Earnings Program Worth It?
Looking for a solid all-around rewards card? You might be thinking about applying for the Costco TrueEarnings card from American Express, which rewards you for spending at Costco and everywhere else with up to 3% cash back. The card is designed for Costco members with good credit and it's a very versatile option. Here's what you need to know before you apply.
As long as you have an active Costco membership ($50/year), you have no annual fee to worry about with the Costco TrueEarnings card - which makes it an EXCELLENT choice for a a cash back credit card.
All cash back you earn each year is issued as an annual reward coupon in February, which expires in August 31st of the issue year. Simply bring your annual coupon to any Costco in the United States and redeem it for cash or merchandise at the store.
Earning Rewards With True Earnings in 2013
The TrueEarnings card has a very straightforward rewards program:
3% cash back on gasoline at stand-alone stations and Costco (up to $4,000 a year, afterward it's 1%)
2% cash back at restaurants in the US
2% cash back on travel purchases, including at Costco
1% cash back everywhere else, including other Costco spending
While the fairly low cap on gasoline cash back may seem like a drawback, remember that spending the average of $50 on gas every week still won't put you at the limit. The cash back on travel is one of the biggest ways to earn, with cash back on tour operators, hotel accommodations, airfare, cruises, car rentals and anything you buy from Costco Travel.
There's also no limit to the cash back you can earn, although you do need to watch the expiration date.
You can also try the American Express Costco Business card, which comes with even higher rewards and a full 4% back on gasoline up to the first $7,000 a year.
Along with the solid rewards program geared toward Costco customers, the card comes with the following benefits:
0% APR for 6 months on purchases; variable 15.24% interest thereafter.
Purchase Protection, which protects against accidental damage or theft of eligible items purchased up to $1,000 per occurrence.
Extended Warranty to extend original U.S. manufacturer warranties by one year if the original warranty was for 5 years or less.
Car rental loss and damage insurance that covers accidental theft or damage to a rental car.
Travel accident insurance up to $100,000 for accidental death and dismemberment.
Zero fraud liability for unauthorized transactions.
Exclusive access to entertainment events courtesy of AmEx.
How Does it Compare?
One popular comparable card is the American Express Premier Rewards Gold, which has an annual fee of $175 (waived the first year) but great rewards on gasoline along with supermarket spending, airfare and more. With the Premier Rewards Gold card, you'll earn 3x points on airfare and 2x points on gas and grocery store purchases with a sign-up bonus of 25,000 Membership Rewards points (a $250 value) and another 15,000 if you spend $30,000 in a year.
While the American Express Premier Rewards Gold has more opportunity to earn higher rewards, it comes with a very high annual fee and you might want to just stick with the no annual fee Costco card if you're already a member.
The Bottom Line -- Is it a Good Deal?
The Costco TrueEarings card is really a great option if you shop frequently at the warehouse and already maintain a membership. After all, you can't beat a great rewards card with no annual fee! The earning rate rivals many rewards cards with annual fees and you can use your reward coupons for merchandise at the warehouse or cold, hard cash in your pocket.