Costco Anywhere Visa Card review: Is it the best card for Costco?

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Costco has inspired a cult-like following with shoppers dedicated to bulk discounts, Kirkland products and low-cost rotisserie chicken. If you count yourself as a loyal Costco consumer, you've probably been asked to apply for the Costco Anywhere Visa® Card by Citi at checkout.

While the card offers a robust rewards program, you may wonder if it's really the best credit card for Costco purchases, offering 2% cash back on all eligible purchases from Costco and Costco.com.

When CNBC Select crunched the numbers, we found that consumers can earn competitive rewards with the Costco Anywhere Visa® Card. Below, we break down the card's rewards, benefits and fees to help you decide if it's the right card for you.

This card currently doesn't offer a welcome bonus, so you can't maximize rewards during the first few months of account opening.

Earning

The Costco Anywhere Visa® Card has a tiered rewards program that benefits commuters, foodies and travelers. Here are the rewards you earn:

• 4% cash back on eligible gas and EV charging purchases for the first $7,000 per year and then 1% thereafter
• 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

Surprisingly, you don't earn the most amount of cash back on Costco purchases, but 2% cash back is still competitive.

Many of the best credit cards for grocery shopping exclude warehouses, such as Costco.

The Blue Cash Preferred® Card from American Express, for example, offers 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) — but since Costco is excluded, purchases at the retailer will only earn 1% cash back. Terms apply. Therefore the Costco Anywhere Visa® Card is a better choice for frequent shoppers of the wholesale club (especially since Costco only accepts Visa-backed credit cards in-store).

Credit cards that offer quarterly rotating 5% bonus categories, such as the Chase Freedom Flex℠, may include warehouse clubs as a bonus category — but only for one quarter. (Check out the current Chase Freedom 5% cash-back calendar.)

CNBC Select calculated how many rewards the average American can earn if they optimize the way they use their Costco Anywhere Visa® Card. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $22,126.

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).

Here's a breakdown of how much cash back you can earn in each category, annually:

• Groceries: $52
• Gas: $89
• Dining out: $110
• Travel: $67
• Utilities: $49
• General purchases: $40
• Total: $406

Based on the annual spending budget, the average American can earn an estimated $406 in the first year of card membership and $2,031 over five years.

Redeeming

The cashback you earn is provided via an annual reward certificate once your February billing statement closes. You have to go to a U.S. Costco warehouse to redeem the certificate for cash or merchandise, which may be a hassle if you don't live near a Costco and instead shop on Costco.com. Learn more about how to redeem Costco credit card rewards.

In comparison, other credit cards allow you to redeem rewards online or via a mobile app, typically within one billing cycle of earning them. And there are even cards that award cash back at the end of every day, such as the Apple Card's daily cash program.

The Costco Anywhere Visa® Card offers a variety of perks beyond its rewards program. Here are some key benefits:

• Travel and emergency assistance
• Worldwide travel accident insurance
• Worldwide car rental insurance
• Damage and theft purchase protection
• Presale ticket access and preferred seating with Citi Entertainment

Terms apply for all benefits.

The Costco Anywhere Visa® Card has no annual fee, but requires an active Costco membership, which starts at $60 for a standard Gold Star membership and doubles to $120 for executive level. If you already have a Costco membership, this isn't a deal-breaker. But if you piggyback off someone else's Costco membership or don't shop at the retailer but still want this card, you'll need to fork over at least $60 for a membership.

This card has a 20.49% variable APR on purchases and balance transfers and no foreign transaction fees.

Applicants need to have excellent credit to qualify for the Costco Anywhere Visa® Card. The exact credit score required varies, but a very good credit score ranges from 740 to 799 and excellent credit is 800 and higher, according to Experian.

Costco Anywhere Visa® vs. Wells Fargo Active Cash® Card

While the Costco Anywhere Visa® Card is great for loyal Costco customers, if you typically shop at other stores or want to take advantage of more flexible rewards, you may want to consider another Visa credit card like the Wells Fargo Active Cash® Card. Costco only accepts Visa-branded credit cards for in-store purchases so they are the only potential alternatives to the Costco Anywhere card.

The Wells Fargo Active Cash® Card offers a flat 2% cash rewards on purchases, along with a welcome bonus of $200 cash rewards bonus after spending $500 in purchases in the first 3 months of account opening. 

Unlike the Costco Anywhere card, this card also provides a 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers (after, 20.24%, 25.24%, or 29.99% variable APR; balance transfer fee of 3% for 120 days from account opening, then up to 5%, min: $5. This can be useful for large Costco purchases where you might need extra time to pay it off without incurring any interest.

Costco Anywhere Visa® vs. Chase Freedom Unlimited®

Another top card to consider is the Chase Freedom Unlimited®, which has no annual fee and earns 6.5% cash back on travel purchased through Chase Travel^SM, 4.5% cash back on drugstore purchases and dining at restaurants (including takeout and eligible delivery service), and 3% on all other purchases (on up to $20,000 spent in the first year). After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel^SM, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.

It also offers a generous welcome bonus: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back! Plus, there's a 15-month 0% intro APR offer from account opening on new purchases and balance transfers (after, 20.49% - 29.24% variable APR). 

It gets better — if you have another Chase-Ultimate-Rewards-earning card like the Chase Sapphire Preferred® Card, get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Travel^SM. For example, 75,000 points are worth over $900 toward travel. With the Chase Sapphire Reserve®, you can convert the rewards you earn with this card into transferrable Ultimate Rewards points and potentially get much more value than one cent per point. Chase's transfer partners range from United Mileage Plus to Southwest Rapid Rewards and World of Hyatt, giving you lots of opportunities to save on flights and hotels.

The Costco Anywhere Visa card provides useful rewards and perks for loyal Costco shoppers, as well as those who spend a significant amount on gas and electric vehicle charging. However, if you're looking to maximize your rewards for other types of spending or don't like the idea of only receiving rewards once a year, you may want to consider other options.

The Costco Anywhere Visa® Card is a good option for loyal Costco fans and travelers who don't mind receiving rewards once a year.

However, if you don't shop at Costco regularly, or if you prefer to do most of your food shopping at supermarkets, consider other rewards credit cards, such as the Blue Cash Preferred® Card from American Express.

And if you want a travel credit card, there are plenty of alternatives with more robust perks, such as the Chase Sapphire Preferred® Card, which offers auto rental collision damage waiver, baggage delay insurance and trip delay insurance.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.

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Information about the Chase Freedom Flex℠ has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.