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Costco is an excellent place to stock up on everything from groceries to clothing to electronics, but when it comes to how you pay, the options are limited. Keep reading to learn about which credit cards the warehouse chain accepts and how to choose a Costco credit card that helps you earn back rewards on your everday purchases.

By now we’ve all seen or heard of the long lines at Costco where shoppers jostle past each other to frantically scoop up bulk packages of toilet paper, paper towels, and canned goods. While major shortages aren’t on the horizon, shopping at Costco can be useful for stocking up on the basics, and much more. Even though you have to pay an annual fee, a Costco membership can help you save on everyday items, and, when you use a carefully chosen Costco credit card, you have the option to get cash back or other rewards with your purchases.

Best Credit Cards for Shopping at Costco

Credit CardAnnual FeeWelcome OfferEarn RateMore Info
The BMO® CashBack® World Elite®* Mastercard®*$120 (waived for the first year)10% cash back for the first three months, fee waived for the first year.

 
5% cash back on groceries; 4% on transit; 3% on gas; 2% on recurring bill payments; 1% on everything elseRead On
BMO CashBack® Business Mastercard®*$0Earn 10% cash back on gas, office supplies, and cell phone/internet bills for the first 3 months.

 
1.75% at Shell®; 1.5% on other gas stations, office supplies and recurring cell phone/internet bills; 0.75% on everything elseRead On
BMO AIR MILES®† World Elite®* Mastercard®$1202,000 AIR MILES bonus miles

 
1 Mile per $12 spent

 
Read on
HSBC World Elite® Mastercard®$149Earn up to 70,000 Points ($350 travel value); Annual fee rebate

 
3% in travel rewards on all eligible travel purchases (6 points/dollar) and 1.5% in travel rewards on all other eligible purchases (3 points/dollar)Read On
MBNA Rewards Platinum Plus® Mastercard®$0Get 4 points per $1 on eligible groceries, digital media, memberships, household utility and restaurant purchases and up to 10,000 bonus points2 MBNA points per dollar on eligible groceries, digital media, memberships, household utility and restaurant purchases; 1 MBNA point per dollar on everything elseRead On

The BMO® CashBack® World Elite®* Mastercard®*

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This useful card lets you earn cash back rewards on your spending. The way it works is pretty straightforward: you earn 5% cash back on groceries; 4% on transit; 3% on gas, 2% on recurring bills and 1% on everything else, including anything you buy at Costco. The welcome bonus lets you amp up those earnings—you get 10% cash back up to $2,600 in your first three billing cycles. You’ll also get the $120 annual fee waived for the first year.

This card may not have the highest cash back return, but it stands out from other cash back cards because of its cool travel perks, such as complimentary membership in Mastercard Airport Experiences provided by LoungeKey and access to Boingo Wi-Fi hotspots around the world. You’ll also get roadside assistance and emergency medical travel insurance coverage, too.

The Details:

  • Annual Fee:$120
  • Income Eligibility: $80,000 (individual) or $150,000 (household)
  • Credit Score Required: Excellent
  • Welcome Offer: 10% cash back for the first three months, fee waived for first year.
  • Additional Benefits: Access to Boingo wi-fi hotspots; Loungekey membership, roadside assistance, travel insurance.
  • Interest on Purchases: 19.99% Cash advances 22.99%
Learn more about the BMO® CashBack® World Elite®* Mastercard®*

BMO CashBack® Business Mastercard®*

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Businesses have a different set of needs, so it’s useful to have a card that earns more cash back on business expenses. The BMO CashBack® Business Mastercard®* offers 1.5% cash back on gas, office supplies and cell phone/internet bills.

Fill up at Costco to take advantage of the welcome offer, which gives you 10% cash back on gas (as well as office supplies, and cell phone/internet bills) for the first three months. After that you’ll get 1.5 % cash back on gas (1.75% at Shell®) office supplies, and cell phone/internet bills. All other purchases, including groceries at Costco, net you 0.75% cash back.

The Details:

  • Annual Fee: $0
  • Income Eligibility: N/A
  • Credit Score Required: N/A
  • Welcome Offer: Earn 10% cash back on gas, office supplies, and cell phone/internet bills for the first three months.
  • Additional Benefits: Earn cash back on every dollar you spend, purchase protection and extended warranty
  • Interest on Purchases: 19.99% | Interest on Cash Advances: 22.99%
Learn more about the BMO CashBack® Business Mastercard®*.

BMO® AIR MILES® World Elite® Mastercard®

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For some people, travel rewards are their top priority. If you’re an AIR MILES collector, then consider the BMO® AIR MILES® World Elite® Mastercard®, which allows you to accrue AIR MILES as you spend. You’ll receive AIR MILES at a rate of 1 Mile/$12 spent, with a welcome bonus of 2,000 AIR MILES. If you shop at an AIR MILES partner, don’t forget to flash your AIR MILES card as well—you’ll be awarded double the points!

If you do your shopping at Costco, using this card can help you rack up the Miles. Plus your annual fee is waived for the first year, keeping more money in your pocket as you earn rewards.

The Details:

  • Annual Fee: $120 (first year free)
  • Income Eligibility: $80,000 individual or $150,000 household
  • Credit Score Required: Excellent
  • Welcome Offer: 2,000 AIR MILES bonus miles; first year fee is waived
  • Additional Perks: Travel insurance, Mastercard Airport Experiences provided by LoungeKey
  • Purchase APR: 20.99% | Cash Advance APR: 22.99%
Learn more about the BMO® World Elite®* Mastercard®*

HSBC World Elite® Mastercard®

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The HSBC World Elite® Mastercard® offers another excellent option if you want to collect travel rewards while you shop at Costco. First, let’s start with the very attractive 70,000-point ($350 travel value) welcome offer: You’ll get 20,000 points just for signing up. Then, after you spend $5,000 in the first 180 days you’ll get 20,000 more points. Add an authorized user for another 10,000 points, and get an additional 20,000 Points after one year for your anniversary.

From there, you earn 3% in travel rewards on all eligible travel purchases (6 points/ dollar) and 1.5% in travel rewards on all other eligible purchases (3 points/ dollar), which includes Costco. You don’t necessarily have to redeem these points for travel—there are gift cards, merchandise, financial rewards, and more—but you’ll get the best return on your points if you do.

This card comes with a lot of perks. Every year, you’ll get a $100 annual travel enhancement credit which you can use for seat upgrades, baggage fees and airport lounge passes. Other benefits include Wi-Fi access through Boingo, a suite of travel insurance coverage and complimentary membership to Mastercard Airport Experiences Provided by LoungeKey.

The Details

  • Annual Fee: $149
  • Minimum Income Requirement: Annual individual income of $80,000 or $150,000 household income, or a minimum of $400,000 in assets under management
  • Credit Score Required: N/A
  • Welcome Offer: Earn up to 70,000 Points in your first year of cardmembership; Annual fee rebate
  • Other Perks: Comprehensive travel insurance; redeem points for travel, financial rewards, gift cards, merchandise, and more; shopping protection
  • Interest Rate on Purchases: 19.9% | Interest on Cash Advances: 22.9% | Interest on Balance Transfers & Cash Advances: 22.9%
Learn more about the HSBC World Elite® Mastercard® credit card.

*This offer is only available to residents of Canada other than the province of Quebec (Quebec residents eligible for separate offer)


MBNA Rewards Platinum Plus® Mastercard®

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This workhorse of a credit card gives you its biggest initial returns across the grocery, digital media, memberships, household utility and restaurant categories. Rewards come in the form of MBNA points, which you can redeem for travel, gift cards, and merchandise or use against your credit card statement. You can even donate your points to charity at a value of 200 points/dollar.

The generous welcome offer gives you 4 points/$1 in those categories during the first 90 days. Plus you can earn up to 10,000 bonus points if you spend $500 in the first 90 days and sign up for paperless e-statements.

After the welcome offer, you earn at a rate of 2 points/dollar in those previously mentioned categories, and 1 point/dollar for everything else, which means your Costco grocery shopping can still help you rack up the rewards. Furthermore, additional benefits include a discounted rate at Avis Rent A Car and Budget Rent A Car and purchase assurance and extended warranty.

The Details

  • Annual Fee: $0
  • Income Eligibility: N/A
  • Credit Score Required: Fair to Good
  • Welcome Bonus: Get 4 points per $1 on eligible grocery, digital media, memberships, household utility and restaurant purchases and up to 10,000 bonus points. (Conditions apply)
  • Other Perks: Purchase assurance and extended warranty.
  • Interest Rate on Purchases: 19.99% | Interest on Cash Advances: 24.99% | Interest on Balance Transfers & Access Cheques: 22.99%
Learn more about the MBNA Rewards Platinum Plus® Mastercard®.

Frequently Asked Questions

Costco only accepts Mastercard. While American Express used to be the credit card vendor of choice for Costco, that all changed a few years ago. Costco, and Costco gas stations, now accept only Mastercard (as well as debit cards and Costco Shop Cards).

Visa credit cards are accepted online. One exception to the Mastercard-only rule is online shopping. Depending on where you are located within Canada, you can order your groceries, appliances, flowers and more through Costco.ca, and you can use your Visa credit card to pay for it.

You buy you lettuce, chicken and milk at Costco, but that doesn’t mean it’s technically a grocery store. If you look at the fine print, it isn’t considered a grocery store merchant by Mastercard. This means, for example, that if you’d used the Tangerine Money-Back Credit Card at Costco (and you had selected “groceries” as one of your 2% cash back categories) your purchases would still only earn at 0.5%. So, if you are a frequent Costco shopper, you need to be strategic about which card you use in order to maximize your cash back or rewards.

The Final Word

While the Costco-branded Capital One® Mastercard® is recommended to Costco members, it’s not actually the best way to reap rewards at the popular warehouse chain. The biggest return with this card is 3% cash back on restaurants, which obviously doesn’t cover Costco purchases. There is a handy 2% back on gas (which you can buy at Costco), but all of your other purchases, including groceries, come in at 0.5% (on the first $3,000 you spend per year) and 1% after that. Many of the cards in this article offer a better return on Costco purchases, as well as perks such as travel rewards.

This post was not sponsored. The views and opinions expressed in this review are purely my own.

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