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6 best credit cards for shopping at Costco

A Costco Wholesale warehouse location in Woodbridge, Virginia.
Saul Loeb | AFP | Getty Images

Costco shoppers are dedicated to the retailer's bulk discounts and rotisserie chicken, but you need to make sure you have the right credit card before you shop there. Since 2016, Visa has been the exclusive credit card of Costco.

That means you won't be able to pay in-store with a credit card backed by American Express, Mastercard or Discover. However, you can use a Mastercard or Discover card at Costco.com and via the Costco app. If you prefer to shop in-store at Costco with a credit card, then make sure you have a Visa-backed credit card.

Here are CNBC Select's picks for the top credit cards for shopping at Costco:

Costco Anywhere Visa® Card by Citi

  • Rewards

    4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all purchases from Costco and Costco.com; 1% cash back on all other purchases

  • Welcome bonus

    No current offer

  • Annual fee

    $0, Costco membership required

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    16.74% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 3% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

    None

  • See our methodology, terms apply.

Pros

  • Generous gas rewards
  • No fee charged on purchases made outside the U.S.

Cons

  • Costco membership is required
  • Rewards are distributed once a year and can only be redeemed at U.S. Costco Warehouses
  • No welcome bonus, so you can’t maximize rewards during the first few months of card opening
  • Estimated rewards earned after 1 year: $261
  • Estimated rewards earned after 5 years: $1,307
  • Estimated rewards earned after 1 year: $261
  • Estimated rewards earned after 5 years: $1,307
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Information about the Costco Anywhere Visa® Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Who's this for? Perhaps the most obvious choice is the Costco Anywhere Visa® Card by Citi. There is no annual fee, and the Costco membership requirement shouldn't be an issue since you need a membership to shop at the warehouse (unless you share with a family member or friend).

Cardholders earn 4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on all purchases from Costco and Costco.com; and 1% cash back on all other purchases.

One quirk about this card: You earn an annual reward certificate once a year, and it's only redeemable at a U.S. Costco Warehouse. You can redeem the certificate for purchases at Costco, a Costco Shop Card (which can be used for purchases at Costco.com) or a check (at Costco's discretion).

Added perks include no foreign transaction fees, travel and emergency assistance, worldwide travel accident insurance and worldwide car rental insurance.

Want even more info? Here are 5 key things to know about the Costco Anywhere Visa Card.

Chase Freedom Unlimited® Card

  • Rewards

    1.5% cash back on every purchase

  • Welcome bonus

    $200 cash back after you spend $500 on purchases in your first 3 months from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months on purchases and balance transfers

  • Regular APR

    16.49% to 25.24% variable on purchases and balance transfers

  • Balance transfer fee

    3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a $5 minimum. After, 5% ($5 minimum).

  • Foreign transaction fee

    3%

  • See our methodology, terms apply.

Pros

  • No annual fee
  • Long intro 0% APR period for purchases and balance transfers
  • Rewards can be transferred to a Chase Ultimate Rewards card
  • Generous welcome bonus

Cons

  • Below average 1.5% cash back
  • 3% fee charged on foreign transactions
  • Estimated rewards earned after 1 year: $528
  • Estimated rewards earned after 5 years: $1,839

Rewards totals incorporate the cash back earned from the welcome bonus

  • Estimated rewards earned after 1 year: $528
  • Estimated rewards earned after 5 years: $1,839

Rewards totals incorporate the cash back earned from the welcome bonus

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On Chase's secure site

Who's this for? The Chase Freedom Unlimited® has no annual fee and a simple cash-back program. Earn 1.5% cash back on every purchase. If you don't want to deal with rotating bonus categories or activation, this card can be a simple way to earn cash back.

Cardholders can take advantage a generous welcome bonus: Earn $200 cash back after you spend $500 on purchases in your first three months from account opening. That's like earning 40% back.

Like the Chase Freedom®, the Chase Freedom Unlimited® also offers a 0% APR for the first 15 months on purchases and balance transfers (then 16.74% to 25.49% variable APR). Cardholders can also benefit from purchase protection and extended warranty protection.

Wells Fargo Cash Wise Visa® card

  • Rewards

    1.5% cash rewards on every purchase

  • Welcome bonus

    $150 cash rewards bonus after you spend $500 on purchases in your first 3 months from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months on purchases and balance transfers

  • Regular APR

    15.49% to 27.49% variable on purchases and balance transfers

  • Balance transfer fee

    3% intro balance transfer fee when you transfer a balance during the first 120 days from account opening, with a $5 minimum. After, up to 5% ($5 minimum).

  • Foreign transaction fee

    3%

  • See our methodology, terms apply.

Pros

  • No annual fee
  • Use your Wells Fargo Debit or ATM card to redeem rewards for cash at Wells Fargo ATMs ($20 increments)
  • Long intro 0% APR period for purchases and balance transfers
  • Generous welcome bonus

Cons

  • Below average 1.5% cash back
  • 3% fee charged on foreign transactions
  • Estimated rewards earned after 1 year: $527
  • Estimated rewards earned after 5 years: $1,838

Rewards totals incorporate the cash back earned from the welcome bonus and assumes you use eligible mobile wallets for 75% of purchases your first year.

  • Estimated rewards earned after 1 year: $527
  • Estimated rewards earned after 5 years: $1,838

Rewards totals incorporate the cash back earned from the welcome bonus and assumes you use eligible mobile wallets for 75% of purchases your first year.

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Information about the Wells Fargo Cash Wise Visa® card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.

Who's this for? The Wells Fargo Cash Wise Visa® card offers a decent 1.5% cash rewards on all purchases. That can increase to 1.8% cash rewards when you use a qualifying mobile wallet, such as Apple Pay and Google Pay, during the first 12 months from account opening.

There is no annual fee and the cash-back program is straightforward, with no activation or rotating bonus categories. And you can conveniently use your Wells Fargo Debit or ATM card to redeem cash back at Wells Fargo ATMs in $20 increments.

The Wells Fargo Cash Wise Visa® card also comes with cell phone protection, up to $600 (subject to a $25 deductible), for eligible damage or theft when you pay your monthly cell phone bill with this card.

Chase Freedom®

  • Rewards

    5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 1% cash back on all other purchases

  • Welcome bonus

    $150 cash back after you spend $500 on purchases in your first 3 months from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months on purchases and balance transfers

  • Regular APR

    16.49% to 25.24% variable on purchases and balance transfers

  • Balance transfer fee

    3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a $5 minimum. After, 5% ($5 minimum).

  • Foreign transaction fee

    3%

  • See our methodology, terms apply.

Pros

  • No annual fee
  • Long intro 0% APR period for purchases and balance transfers
  • Rewards can be transferred to a Chase Ultimate Rewards card
  • Generous welcome bonus
  • Opportunity to earn up to 5% cash back in select categories upon activation

Cons

  • Bonus categories must be activated each quarter
  • Cash-back program limits 5% cash-back earnings to $1,500 a quarter
  • 3% fee charged on foreign transactions
  • Estimated rewards earned after 1 year: $373
  • Estimated rewards earned after 5 years: $1,263

Rewards totals incorporate the cash back earned from the welcome bonus

  • Estimated rewards earned after 1 year: $373
  • Estimated rewards earned after 5 years: $1,263

Rewards totals incorporate the cash back earned from the welcome bonus

read more
Learn More
Information about the Chase Freedom® Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Who's this for? The Chase Freedom® offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%) and 1% cash back on all other purchases. Sometimes wholesale clubs, such as Costco, make the list of quarterly bonus categories.

Costco wasn't on the 2019 cash-back calendar, but it may appear for 2020. The bonus categories for the remainder of 2019 include department stores (including Bloomingdales, Nordstrom and Macys, view the full list of participating stores) and purchases made using PayPal and Chase Pay.

The Chase Freedom® has no annual fee and offers a competitive 0% APR for the first 15 months on purchases and balance transfers (then 16.74% to 25.49% variable APR). This allows you to pay for gifts over time without incurring interest.

PenFed Power Cash Rewards Visa Signature® Card

  • Rewards

    1.5% cash back on all purchases, 2% cash back on all purchases for PenFed Honors Advantage members

  • Welcome bonus

    $100 statement credit when you spend $1,500 in the first 90 days from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 12 months on balance transfers; N/A for purchases

  • Regular APR

    11.74% to 17.99% variable for purchases and balance transfers

  • Foreign transaction fee

    None

  • Balance transfer fee

    3%

  • See our methodology, terms apply.

Pros

  • 2% cash back on all purchases for PenFed Honors Advantage members
  • Welcome bonus, which is hard to find among flat-rate cash-back cards with no annual fee
  • No bonus category activations or limits to the amount of cash back you can earn
  • Competitive 11.74% to 17.99% variable APR

Cons

  • 3% balance transfer fee
  • Credit union membership is required
  • Estimated cash back earned after 1 year: $537
  • Estimated cash back earned after 5 years: $2,285

Rewards totals incorporate the cash back earned from the welcome bonus. We assumed you're a PenFed Honors Advantage member, earning 2% cash back.

  • Estimated cash back earned after 1 year: $537
  • Estimated cash back earned after 5 years: $2,285

Rewards totals incorporate the cash back earned from the welcome bonus. We assumed you're a PenFed Honors Advantage member, earning 2% cash back.

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Learn More
Information about the PenFed Power Cash Rewards Visa Signature® Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Who's this for? The PenFed Power Cash Rewards Visa Signature® Card can earn you 2% cash back on every purchase, if you're a PenFed Honors Advantage member. Otherwise, you earn 1.5% cash back on all purchases.

This card also offers one of the most reasonable APRs: 11.74% to 17.99% variable for purchases and balance transfers, which can minimize interest charges on lingering balances. However we always recommend you pay off your bill in full each month.

PenFed is a credit union, so membership is required to open a card. Anyone can join by applying, opening a savings account with a $5 deposit and maintaining a $5 account balance.

To earn the higher cash-back rate, you need to become an Honors Advantage member in one of several ways: be in an active military service status, a member of the Reserves or National Guard, an honorably discharged U.S. military veteran or retired from such service; be the primary owner on both the credit card and checking accounts of any existing open PenFed product (excluding PenCheck Limited accounts); or open a new Access America checking account (which requires a daily balance or monthly direct deposit of $500 or more to waive the $10 monthly service fee).

Chase Sapphire Preferred®

  • Rewards

    2X points on travel and dining worldwide, 1X points on all other purchases

  • Welcome bonus

    60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening — worth up to $750 toward travel when you redeem through Chase Ultimate Rewards®

  • Annual fee

    $95

  • Intro APR

    None

  • Regular APR

    17.49% to 24.49% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

    None

  • See our methodology, terms apply.

Pros

  • Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
  • Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
  • Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
  • No fee charged on purchases made outside the U.S.

Cons

  • $95 annual fee
  • No hotel-specific perks or credits
  • No introductory 0% APR
  • Estimated rewards earned after 1 year: $997
  • Estimated rewards earned after 5 years: $1,986

Rewards totals incorporate the points earned from the welcome bonus

  • Estimated rewards earned after 1 year: $997
  • Estimated rewards earned after 5 years: $1,986

Rewards totals incorporate the points earned from the welcome bonus

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Apply Now
On Chase's secure site

Who's this for? The Chase Sapphire Preferred® is one of the best travel credit cards available and pairs well with the other two Chase credit cards mentioned earlier. Chase Sapphire Preferred® cardholders earn 2X points on travel and dining worldwide and 1X points on all other purchases.

This card is notable for the strong redemption rate when you redeem points for travel via Chase Ultimate Rewards®. Points are worth 25% more, so the 60,000-point welcome bonus is worth $750 towards travel. This is a great way to maximize the value of points and the welcome bonus.

Beyond rewards, cardholders can benefit from helpful travel perks, such as no foreign transaction fees, trip cancellation/interruption insurance, auto rental collision damage waiver, travel and emergency assistance services, baggage delay insurance and trip delay reimbursement.

Our methodology

To determine which cards offer the best value for Costco shoppers, CNBC Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

We also estimated how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee. Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.

CNBC Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2018 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

Esri's data team created a sample annual budget of approximately $21,852 in retail spending. This budget is comprised of the most common spending categories, including groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)

Best credit cards for shopping at Costco

Credit Card
Costco Anywhere Visa® Card by Citi
Chase Freedom Unlimited®
Wells Fargo Cash Wise Visa® card
Chase Freedom®
PenFed Power Cash Rewards Visa Signature® Card
Chase Sapphire Preferred®
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.