How the Citi Visa Costco Card Works and Costs

Overview of the Citi Visa Costco Card

The Citi Visa Costco Card is a cash back credit card issued jointly by Citibank and Costco Wholesale. This card is designed specifically for Costco members and can only be used at Costco locations and Costco.com, as well as at gas stations and restaurants anywhere in the world. The card offers a tiered cash back rewards structure, meaning you earn different percentages of cash back depending on where you make your purchase.

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As of 2024, the Citi Visa Costco Card offers 4% cash back on gas purchases (up to $7,000 per year, then 1% thereafter), 3% cash back on restaurants and travel purchases, and 2% cash back on Costco warehouse purchases and Costco.com purchases. Other eligible purchases earn 1% cash back. These rewards are paid back to cardholders as an annual cash back certificate that can be used at Costco warehouses or online.

The card has an annual membership fee of $65, which is separate from your Costco membership fee. This annual fee is charged to the cardholder regardless of card usage. The card does not have foreign transaction fees, meaning you can use it internationally without paying extra charges for currency conversion, though the card itself is a Visa card that works wherever Visa is accepted.

One important distinction is that this card functions as a co-branded card rather than a general-purpose rewards card. You cannot use the Citi Visa Costco Card at merchants outside the categories mentioned above, except for the 1% cash back on other purchases. This makes it primarily a Costco shopping card rather than an everyday card for all purchases.

Practical Takeaway: The Citi Visa Costco Card works best for people who shop regularly at Costco and fill up gas frequently. If you spend less than $1,500 per year across these categories, the cash back rewards may not offset the $65 annual fee.

How Cash Back Rewards Work on This Card

Cash back rewards on the Citi Visa Costco Card are earned automatically with every purchase in qualifying categories. Unlike some credit cards that deposit cash back directly to your bank account, this card's rewards work differently. Each year, Costco calculates your total cash back earnings and issues an annual Costco Cash card to you. This card can only be used at Costco warehouses or on Costco.com.

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The tiered structure means your cash back earnings vary significantly depending on where you spend. For example, if you spend $3,000 on gas in a year, you would earn $120 in cash back (4% of $3,000). However, if you spend the same $3,000 on regular Costco warehouse purchases, you would earn $60 in cash back (2% of $3,000). The difference between these categories is substantial.

Cash back certificates expire one year from the date they are issued. If you do not use your Costco Cash before it expires, the funds are forfeited and cannot be recovered or transferred. This means you need to use your rewards within a 12-month window or lose them entirely. Costco sends you a notification when your certificate is about to expire, giving you advance warning to use your rewards.

The cash back cap on gas purchases is important to understand. You earn 4% cash back on gas purchases up to $7,000 per year, which equals a maximum of $280 in annual gas rewards. Any gas purchases beyond $7,000 in a single year only earn 1% cash back. For someone who fills up frequently, this cap means that very high gas spending does not proportionally increase rewards beyond that threshold.

You can track your cash back earnings by logging into your Citi account online or calling the customer service number on the back of your card. Citibank provides detailed statements showing your purchases in each category and the cash back earned.

Practical Takeaway: Mark your Costco Cash expiration date on your calendar when you receive it. Plan Costco shopping trips accordingly to use up your rewards before the deadline, or you will lose the value entirely.

Annual Fees and Cost Structure

The Citi Visa Costco Card charges an annual fee of $65. This fee is charged to your card account once per year, typically during your card anniversary month. Unlike some premium credit cards that waive the first year's fee, the $65 fee applies from your first year of card ownership. This fee is non-refundable, meaning even if you cancel the card shortly after the annual fee is charged, you will not receive that money back.

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Beyond the annual card fee, there are additional costs to understand. If you carry a balance on the card (meaning you do not pay off your full statement balance each month), interest charges will apply. As of 2024, the APR for purchases on the Citi Visa Costco Card ranges from approximately 17.24% to 27.24%, depending on your creditworthiness. This rate is determined when the card is issued and may change over time. Carrying even a small balance of $1,000 would result in roughly $172 to $272 in annual interest charges alone.

There are no foreign transaction fees on the Citi Visa Costco Card, which is valuable if you travel internationally. However, you should be aware that while the Visa logo allows use in many countries, your card may still be declined at some merchants due to network availability or other factors.

Late payment fees apply if you miss your payment deadline. Current federal regulations limit late payment fees to $41 if you pay late, or $29 if you have been late in the previous six months. Missing a payment can also damage your credit score and trigger a penalty interest rate increase.

To determine whether the $65 annual fee is worthwhile, consider your annual cash back earnings. If you earn $65 or less in annual rewards, the fee completely eliminates your profit. You would need to earn at least $66 annually just to break even. Someone who spends $1,625 on Costco warehouse purchases alone would earn approximately $32.50 in rewards (2%), not enough to cover the fee. Combined spending across categories would be needed.

Practical Takeaway: Calculate your projected annual rewards before getting this card. If you spend less than about $3,250 combined on qualifying purchases (accounting for the different reward rates), the annual fee will exceed your cash back earnings.

How to Use the Card at Costco and Beyond

Using the Citi Visa Costco Card at a Costco warehouse is straightforward. You simply present the card at checkout like any other credit card. The cashier scans or swipes your card, and the payment is processed. You do not need to do anything special to earn cash back rewards—they accrue automatically on all qualifying purchases made with the card.

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One important requirement is that you must present a valid Costco membership card at checkout. While the Citi Visa Costco Card serves as a Costco membership card for warehouse entry and purchases, you still need to maintain an active Costco membership to use it. If your Costco membership expires, you will need to renew it before using the card at the warehouse, even though the card itself may still be active.

Online purchases at Costco.com also earn the 2% cash back reward for Costco warehouse items. You simply enter your Citi Visa Costco Card information during checkout on the website. Digital delivery items like Kindle books on Costco.com earn 2% cash back, while items shipped to your home earn 2% as well.

At gas stations and restaurants outside of Costco, you can use the card anywhere Visa is accepted to earn 4% on gas or 3% on restaurants. You are not limited to specific gas station brands or restaurant chains—any establishment that accepts Visa and is coded as a gas station or restaurant will earn the higher rewards. This includes rental car gas stations, parking garage fuel options, and virtually any restaurant from fast food to fine dining.

Travel purchases made with the card earn 3% cash back. This category includes airfare, hotels, car rentals, and other travel-related purchases made directly with providers. If you book through a travel website or use a third-party booking service, it depends on how that purchase is categorized by the merchant. For maximum clarity, booking directly