Pros: No Annual Fee, Great Cash Back Benefits, Just need one card at Costco
Cons: Low Credit Limit, Interest Rate is just okay
In a tight economy, credit cards offering "Cash Back" rebates are mighty attractive, as every extra dollar helps. When gas prices get up to $4.25 per gallon, as they did in my area late in 2008, a credit card that offers 3% cash back on gasoline purchases is nearly orgasmic. So, when my husband was approached by the gas attendant to apply for the Costco American Express Card, he jumped on it. Now, not only would I be able to get gas without having to bug him for money, but we'd get some money back on it, as well as an awesome stainless steel thermos.
Some Basics About the Costco Amex
For one thing, the Costco Amex is now called the "American Express Costco TrueEarnings Card." Since they haven't changed it on my card, I still call it the Costco American Express card. Beyond that, we are looking at a no annual fee credit card that not only serves as a credit card, but as your Costco membership card as well. This not only saves you an extra piece of plastic in your wallet, but having your photo on the card should offer you added identity theft protection, assuming the people who are taking your payment actually look at the picture.
Currently, we are paying an APR of 13.24% on Purchases and 25.24% on Cash Advances, so this is definitely a card you don't want to carry a balance on. Considering the fact that our card started off with a $2000 balance (and our credit scores are in the upper 700's), it shouldn't be too hard to keep your balance under control.
Perks: Cash Back
As I've already mentioned, the Costco American Express card has pretty good cash back incentives. Unlike some cards, in which you get the rewards on your anniversary date, Costco AMEX gives you your reward check (good at Costco only) with your January billing statement (which arrives in February). Depending on what category your purchases are in, the rewards are:
3% on first $3000 of Gas purchases/1% thereafter
3% on Restaurants
2% on Travel
1% all others
We make sure to always use our Costco American Express card every time we buy gas -- not only when we are in Costco. We spend about $200 on gas each month, which amounts for $70 of our rebate at the end of the year. That, in combination with no annual fee, makes this card a no-brainer for us, as we shop at Costco frequently.
If you have an Executive membership at Costco, you can save even more money. We get 2% of our Costco purchases back through our Executive membership every time our Costco membership needs to be renewed. In addition, by using our Costco AMEX when we shop at Costco, we get an extra 1% on those purchases.
Is the American Express Costco TrueEarnings Card right for you?
As I said before, the interest rate on this card isn't great, but the cash back is great, and there's no annual fee. I recommend this card for Costco shoppers who like the thought of getting some money back on their gas purchases (which are already pretty low when you buy at Costco). We have not had any problems with this card in the year and a half that we have used it.
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