Effectively, if you buy gas in any capacity, you should be buying it smartly and for this we need COSTCO… But read on. PS. I’m NOT sponsored by Costco or any affiliates, just sponsored by smart money moves (not a company).
Simply put:
Costco has a credit card (that CAN be used outside of Costco at ANY place you normally shop) that technically cost $60 a year/annual(but this also pays your Costco membership fee) and has a 4% money back on GAS perk and 3% back on restaurants and travel perk! That’s huge! Costco also has some of the cheapest (price wise not quality) gas on the market. It’s a no Brainer situation.
Simple Disclaimer:
I feel it is important to note that you should understand how properly pay off a credit card to maximize your credit building potential and minimize any cost! Look here to see the right way to pay a credit card to maximize your credit.
Simple explanation:
Since you have to buy gas no matter what, why not earn money back, boost your credit score, and have a Costco membership for cheap lunch on certain days? The card is a no Brainer because it has one of the highest percentage backs for a common necessity if you own a gas powered car. You have to buy gas, and depending on how much and how often, it’ll pay for the membership and some. It literally pays for the membership after spending $1500 dollars on gas alone(sounds like a lot, but it’s not!). You also earn on food purchases on restaurants and travel related expenses. That’s $2000 dollars on food alone to pay for the years fee. We’ll break down some math, but not going for this card is costing you serious money.
Simple math:
So the money back piece is given to you yearly at 1 time. Unlike other credit cards, this Costco card pays money back annually rather than monthly. It’s like a tax return!
Now with that in mind you accumulate the return when you spend (this is effectively on the gonna happen list… Unless you drive electric and NEVER eat out).
Now as previously mentioned, gas gets you 4% back (upto $7000 USD then 1%) and restaurants are 3% unlimited.
So let’s say that the average person is HIGHLY unlikely to reach $7k in gas over a years time! Unless you drive professionally with companies like Uber, Lyft, Postmates, or similar. $7k a year is roughly $584 a month on gas. If you pay that much, than you’ll earn back $280 cash at a minimum after 1 year. That’s way better than the nothing you get so far!
Now according to the value penguin, the average American pays $250 a month for gas. This is the average, so some are higher, some are lower. That’s $3k a year on average on gas aka fuel for your car. Just the average alone, that’s $120 back from gas alone.
If you want to do the math yourself, just track your gas cost for a month of normal driving and multiply it by 0.04 (4%) and that will give you what you’ll earn a month.
Mind you, this is ONLY gas. You still have restaurants aka fast food for 3% and 2% back at Costco and 1% back on other purchases.
Now the average American (single American) spends roughly $1200 a year on fast food. This is a single person and that alone would be $48 a year cash.
Just combining these averages, that’s $168, minus $60 for the Costco membership (aka the cards cost). This price is without other regular shopping that will also earn points back.
This card is a complete no Brainer!!!
Simple Pros:
- 4% back on gas
- 3% back on restaurants and travel
- Smartphone protection if you pay with your credit card
- Extended warranty on items bought with this card.
- 2% back at Costco
- It is your Costco membership (variety of deals)
- Costco hot dog (Famously cheap)
- App friendly
- Costco customer service
Simple Cons:
- $60 a year
- Costco isn’t the cheapest place to shop
- If you cancel your membership, you MUST cancel the card
- Customer service for Citi (the credit card company) is sub-par
Simple conclusion:
Despite the cons, I believe that this card is amazing and is completely worth getting. I highly recommend it and the best part about it is going and grabbing a Costco hot dog or a chicken bake.
The math adds up and speaks volumes as to why this card is worth it!
Simple Money 