The Costco Mastercard is a great card for Costco members who are avid restaurant lovers. If you rarely eat at home, this card is a must have for you because it offers 3% cashback on restaurant purchases without any spending limits. However, it offers little else, and people looking for cashback for shopping at Costco stores will find themselves disappointed.
You can overlook the fact that it doesn’t offer a welcome bonus because it doesn’t charge an annual fee, but this card is for Costco members only, which is a big let down if you’re not.If you’re a Costco member and you don’t already have this card in your wallet, you’re missing out!
With over 35 warehouses in Ontario alone and more than 100 across Canada, it’s safe to say that Costco is a retail giant. In this article, we’ll give you a breakdown of the Costco Mastercard credit card, what it has to offer, alongside its weaknesses – ultimately helping you decide if you want it in your wallet.
The Costco Mastercard In A Nutshell
Costco is a large retail chain with which I’m sure you’re familiar, and the Costco Mastercard, as you may imagine, is nothing more than a credit card issued by Costco that uses the Mastercard global payment network. At first glance, the Costco Mastercard sounds like the perfect tool for Costco shoppers all around Canada. In fact, it’s a given that most people searching “Costco credit card Canada” would be searching for a card that would provide them with benefits for shopping at Costco. Unfortunately, that’s not the case at all.
However, it does provide benefits to a particular target audience. Peculiarly enough, this target audience has nothing to do with Costco, but we’ll cover that in detail later. For now, here’s everything that you need to know about the Costco Mastercard to get a glimpse of what it’s all about.
|Cash Back||Restaurants: 3.00%|
Other purchases: 0.50-1.00%
As you can see, you get nothing in particular for being a Costco shopper with this card. It focuses mainly on people who like to eat out. Furthermore, it requires you to be a member of Costco. Yes, you cannot attain this card if you don’t have a membership at Costco, which is the card’s major downside.
The Costco Mastercard In Depth
Here’s everything you’re ever going to need to know about this card. I’ve covered all its pros and cons, and by the time you’ve read this article, you’ll know exactly whether you want this card for yourself this 2020 or not.
Let’s Talk About The Cash Back
3% cashback on restaurants without any limits whatsoever? Sounds amazing, right? I mean, no limit on your cashback is pretty much the golden deal that we look for in literally every cashback card out there, and 3% is a big, big return compared to other cards.
You’re Mostly Good With Restaurants
It’s true. At every restaurant (except for the small eateries inside Costco stores, for some inexplicable reason), you’ll get 3% cashback on your spending. There aren’t any strings attached to this offer, and you can eat out as much as you want. Of course, 3% isn’t something to go over the moon for, but it’s a decent amount of saving that anyone can appreciate. If you have this card, you should definitely take your friends out and pay for their food sometimes.
Gas Isn’t Bad Either
At a 2% cashback rate, it won’t hurt to pay for gas with this card. However, there are plenty of cards out there that do a better job – so it’s not something that helps this card stand out. Besides, why on earth is the Costco Mastercard – a credit card by Costco, focusing on gas rather than … you know … groceries?! It’s a mystery that’ll keep me awake for plenty of nights to come.
The Rest Is Abysmal At Best
0.5% cashback. Yes, you heard us right.
That is until you reach $3,000 in purchases with this card during the year. After that, you can start earning 1% cashback on all items other than gas and restaurant purchases. That pretty much crosses out this card for purchases outside of these two categories because I’ve seen student credit cards that offer better cashback deals.
You Get Your Cashbacks Once A Year
Love it or hate it, it’s there. For some people, it’s a major plus as you’ll receive all of your cash back in the form of credit ever January. For others, it’s a nuisance as you have no control over when you’re getting your cashback. We fall into the latter category, but you might think differently.
The Capital One Costco Mastercard offers plain benefits for travel. You’ll find similar (if not better) benefits with most credit cards. However, these benefits are basically free, as this card has no annual fee. The travel-related benefits that come with the Costco Mastercard are:
Travel Accident Insurance
You, your spouse, and legally dependent children are all entitled to charge this card for a maximum of $250,000 for accidental loss of life or permanent injury while traveling on a bus, train, ship, plane, etc.
Car Rentals Theft And Damage Coverage
Your rental car will be completely insured by the Capital One Costco Mastercard against theft or collision. You don’t need to sign any insurance for your rental company, which will end up saving you tons of money in the long run. This insurance is valid for 31 days of renting the vehicle.
Baggage Delay Insurance
You stand to be reimbursed by a maximum of $100 per day if your baggage is delayed at the airport.
There’s nothing special to see here, yet keep in mind that, as we just mentioned, you get these benefits for free. If you’re really interested in being protected by your credit card while you’re traveling, you might want to check out the Meridian Visa Infinite*. It has some brilliant policies on travel insurance that blow some of the most expensive credit cards out of the water – and it doesn’t have a huge annual fee either. If you’re looking for the most comprehensive travel insurance, then your best bet is the Amex Platinum card.
The fact that the Costco Mastercard doesn’t offer any particular benefit for shopping at Costco doesn’t mean it doesn’ offer any shopping benefits at all. With this card, you’ll receive three important benefits which are:
You stand to get as much as 2 years of extra warranty for your products. Keep in mind, though, that this only applies when you purchase the entire item using this credit card only. If you use gift cards, cash, or another card to cover a partial cost, this feature will not apply. It’s not just the Costco Mastercard, however. Extended warranties work this way for most credit cards, so be sure to watch out for this!
You’ll be protected by your card against theft and damaged of your purchased products for 120 days after purchase.
If you happen to miss a sale, don’t feel down. The Costco Mastercard makes sure that you have no buyer’s remorse after missing an opportunity to save money. It’ll cover your losses for up to $100 after 60 days of you buying that product. That is to say, if the product you purchased goes on sale or has its price lowered within 60 days of you purchasing it, your losses will be mitigated.
Now, For The Main Issue With The Costco Mastercard
We’ve touched on how this card doesn’t really favor Costco shoppers very much.
That’s fine, really. Costco just came up with a card for people who aren’t really concerned with shopping at their stores and want to eat at restaurants, right? Wrong!
You Need A Membership At Costco To Have The Costco Mastercard
It makes literally no sense whatsoever for this to happen. It heavily disincentivizes people from ever wanting to come near this card because Costco memberships cost a minimum of $60 and can go up until $120.
You have to make the choice whether the Costco Mastercard is worth the membership. Assuming you’re getting this credit card for restaurants alone, you’re going to have to spend at least $2,000 on restaurants to break even via cashback.
$2,000 x 3% = $60
If you have no intention of spending more than $2,000 on restaurants a year, you have no business getting this card.
However, the notion that this card has $0.00 annual fees is simply misleading, because you still have to pay the Costco membership fee.
That been said, this credit card is actually just a way to pamper existing Costco members, as it doesn’t do much in terms of attracting new customers to Costco.
This Card Can Replace The Costco Membership Card
This is somewhat of a plus for people who already have Costco membership cards as they won’t have to carry two cards around. The Costco Mastercard doubles as a membership card as well. So, yes … you’ll need to carry one less card in your wallet.
You can tell that the real benefits of the Costco Mastercard don’t add up to much when more space in your wallet stands as a benefit for signing up to this card.
So, Should You Get The Costco Mastercard?
Well, are you already a member at Costco? If yes, then you should drop what you’re doing, and apply for the Costco Mastercard this very second. Yes, just stop reading and press the “Apply Now” button below, because you’re missing out big-time.
However, if your answer is no, then you most likely shouldn’t get this card. This is doubly true if you don’t have any intention of shopping at Costco because the membership will be useless to you as well.
However, if you really love eating out at restaurants, and spend more than $2,000 a year at restaurants alone, then it could still be a good deal, although you’d probably do a lot better if you chose another card that will give you more rewards on everyday purchases.
For example, say, you go out and eat around five times a week and order a meal that costs $20. Once a month, you also have a larger meal that costs around $50. Perhaps you throw a party or two during the year which costs around $200.
That puts us at a total of $400 + $50×12 + $20x5x4x12 = $5,800.
You’ll have broken even with the cost of the card when you cross the $2,000 mark, as mentioned above.
That means you stand to save $3,800 x 3% = $114 each year if you’re an absolute fanatic of eating out. We recommend you order a salad every once in a while. That’s pretty much it. We don’t think this card is worth it if your restaurant eating habits aren’t like this.
On the whole, this card has left us confused. At least Amazon.ca’s credit card aims at its own customers, even though it falls short. We don’t recommend the Costco Mastercard because it applies to a very small percentage of people who’re already members of Costco. For everyone else, it simply isn’t alluring. If you feel like it’s for you, go ahead and check it out: