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:
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 other purchases from Costco and Costco.com; 1% cash back on all other purchases
No current offer
$0, Costco membership required
N/A for purchases and balance transfers
15.24% variable on purchases and balance transfers
Either $5 or 3% of the amount of each transfer, whichever is greater
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 eligible 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 cash (at Costco's discretion). Learn more about how to redeem Costco credit card rewards.
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.
Earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on dining (including takeout) and drugstores and 1.5% on all other purchases
$200 cash back after you spend $500 on purchases in your first 3 months from account opening
0% for the first 15 months on purchases
14.99% to 23.74% variable on purchases and balance transfers
Either $5 or 5% of the amount of each transfer, whichever is greater
3% of each transaction in U.S. dollars
Who's this for? The Chase Freedom Unlimited® has no annual fee and a simple cash-back program. Earn 5% cash back on travel purchased through Chase, 3% on dining, including takeout, and drugstores and 1.5% on all other purchases. 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.
The Chase Freedom Unlimited® offers a 0% APR for the first 15 months on purchases (then 14.99% to 23.74% variable APR). Cardholders can also benefit from purchase protection and extended warranty protection.
1.5% cash rewards on every purchase
$150 cash rewards bonus after you spend $500 on purchases in your first 3 months from account opening
0% for the first 15 months on purchases and qualifying balance transfers
14.49% to 24.99% variable on purchases and balance transfers
Introductory fee of 3% ($5 minimum) for 120 days, then 5% ($5 minimum)
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.
1.5% cash back on all purchases, 2% cash back on all purchases for PenFed Honors Advantage members
$100 statement credit when you spend $1,500 in the first 90 days from account opening
0% promotional rate for the first 12 months on balance transfers
14.99% to 17.99% variable on purchases; 17.99% non-variable on balance transfers
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 (which requires a qualifying checking account or military affiliation). Otherwise, you earn 1.5% cash back on all purchases.
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).
5X points on Lyft rides through March 2022, 2X points on travel and dining worldwide, 1X points on all other purchases
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®
15.99% to 22.99% variable on purchases and balance transfers
Either $5 or 5% of the amount of each transfer, whichever is greater
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 booked through Chase Ultimate Rewards (you need to spend $4,000 within the first three months to earn the bonus). 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.
Before you apply for a credit card, you should always ask yourself a few questions that can help shape which credit card is best for your needs.
Credit cards provide numerous perks beyond the ability to buy now and pay later. You may earn bonus rewards in select categories, benefit from annual statement credits, receive a 0% APR period and many other benefits. Review what credit card benefits are offered by your card, then take full advantage of them.
So if you open the Citi® Double Cash Card, you receive no interest for the first 18 months on purchases (then 13.99% to 23.99% variable APR). Consider paying for any upcoming large purchases with that card and benefiting from interest-free financing.
Then if you plan on traveling abroad, cards like the Costco Anywhere Visa® Card, PenFed Power Cash Rewards Visa Signature® Card and Chase Sapphire Preferred® are the best options since they have no foreign transaction fees.
Don't miss: The best store credit cards
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 2019 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 $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). 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.)