NOTE: Effective June 19, 2016, Costco discontinued the use of AMEX True Earnings Rewards card and was replaced by Costco Citi Anywhere VISA Card.
If you do not know it yet, Costco stores do not accept any credit card except for American Express (Amex). Either you will have to pay cash, checks, debit cards, Costco Cash Card or any Amex credit card. As such, Costco has formed a partnership with AMEX and offers the Costco American Express True Earnings Card.
But how good is this True Earnings Card?
Will this be the right card for you?
Here is a closer look of the good and the bad aspects to determine if this is right for you before signing up or opening a new account!
The Good – Costco Amex TrueEarnings
Costco and AMEX Credit Card Into One
Well, it is a credit card and a Costco Membership card at the same time. What I like about this is that your Costco membership number is also imprinted on the card along with the photo of you. So when you go into Cosctco, you do not have to carry the Costco card with you, you can just flash your True Earnings card and they would let you in and allow you to shop at the store. It is also convenient when you pay at the Costco gasoline stations as you will only have to slide one card in order to purchase gas.
Pay Annual Costco Membership Automatically Using the True Earnings Card.
You also have the convenience of paying the annual Costco membership automatically using the True Earnings card. One reason that I have this done is to avoid missing the rewards because of not having have a valid Costco membership as discuss later on the “The Bad” side.
No annual fee
There is no annual fee for the card.
Cash Back on Purchases
The biggest cash back is 3% but it only applies to gasoline purchase of up to $3,000 and the cash back is then reduced to 1% thereafter. It also offers 2% cash back when you use at restaurants or for travel and only 1% for everything else including shopping at Costco. Yes, the card is not limited into shopping at Costco exclusively, you can use it anywhere else, too.
No Limit On The Cash Back
Unlike the Costco Executive Membership that limits the cash back to just $750 (November 1, 2011), there is no limit to how much cash back rewards for your purchase.
Rewards can be converted to cash
The rewards coupon can be redeemed at the Costco warehouse stores for Costco merchandise, cash, or cash equivalent. The coupon has no value if not redeemed in person at a Costco Warehouse before the expiration date (usually August 31 of the year of issuance). If you do not use the entire coupons on a Costco purchase, any unused portion of your reward coupon may be issued in cash or cash equivalent at the Costco Warehouse.
Top Benefits When Using Card for Travel
Costco TrueEarnings Cardmembers have access to Global Assist® Hotline, Roadside Assistance, Car Rental Loss and Damage Insurance, and Travel Accident Insurance.
- Global Assist Hotline – provides emergency assistance for Cardmembers traveling at least 100 miles away from home. While the many Global Assist Hotline coordination and assistance services are free benefits from American Express, Cardmembers are responsible for the costs charged by third-party service providers.
- Roadside Assistance dispatch service is available to Cardmembers when they travel by car.
- Car Rental Loss and Damage Insurance – Car Rental Loss and Damage Insurance can provide coverage for theft of, or damage to, most rental vehicles when you use your TrueEarnings Card to reserve and pay for an auto rental.
- Travel Accident Insurance – Travel Accident Insurance can provide Cardmembers accidental death and dismemberment insurance while traveling on a Common Carrier Conveyance (plane, train, ship, helicopter, or bus) when the entire fare has been charged to the TrueEarnings Card.
The Bad – Costco Amex TrueEarnings
Cancellation and Forfeiture of Rewards With No Valid Costco Membership
The problem with the earned rewards is that you must have a valid Costco membership at the time of receiving the rewards. Your American Express account will be cancelled and your annual rewards forfeited if you cancel your Costco membership. So if you have this card and you intend on canceling your Costco membership, make sure that you review your reward statement to see if you still have cash back rewards available before canceling. In addition, if you inadvertently forgot to pay for your membership, you may end up not receiving the rewards. One convenient way to ensure that your Costco membership stays active is to have your annual membership fee automatically billed to your TrueEarnings Card. Please contact Costco at 1-800-774-2678 to enroll in the auto-bill feature if you are not already enrolled.
Annual Rewards Expire after 6 months of issuance
The rewards expire really soon. Usually, the cash back rewards are issued on February of each year and must be used by August 31 of the same year. Otherwise, it will be forfeited.
Need To Replace Both Cards When Lost
When I lost my True Earnings card, I have to call AMEX to cancel the card and to send me a new one. Little that I know that my Costco membership card was canceled as well. When I went to pay using the old Costco membership card, it was not working as the old number was no longer recognized so I ended up getting a new Costco membership card with the new number (and it has to match what’s on my True Earnings Card).
Limitations on the Additional Cardholder
Because the True Earnings card is tied to your Costco membership, you cannot just add any other card holder unless he or she is also the “additional household member” card holder for the Costco membership card.
Rewards Are Not Transferable
The coupons may only be redeemed by the either one of the card members listed on the account (the main member or the additional Cardmember on the TrueEarnings account). However, additional Costco card holder Household Membership Card holder cannot redeem the Annual Reward Coupon of the costco member unless he or she is also a Cardmember on the TrueEarnings account.
Interest Rate Is Really High
The annual interest rate is at least 12.99% and they do not offer anything lower even if you have excellent credit history. Nothing new with all AMEX cards. So if you do not pay off your card after the purchase, then any rebates that you’ll get will be offset by the interest that you’ll pay in the long run.
Other Limitations:
- Rewards coupon may not be used to pay for the outstanding balance on your AMEX card
- Rewards coupon cannot be redeemed at Costco.com, only at the stores.
The Verdict
I own the card and the cash backs are a thing of beauty since I do get quite a bit. Using the card for purchases really add up to the savings. The limitations, in my opinion, are very minor compared to the overall benefits of having one.
Related Articles:
- How to get free membership at Costco
- 5 Ways to shop at Costco without being a member
- Where to find Costco Membership discounts
- How to become a member of Costco: 4 Ways to Sign-up
- How to save at least 20% on your next restaurant and entertainment using Costco
- Costco American Express Card: A Few Things You Need to Know or Watch Out For
- Shopping At Costco: The Good and the Ugly
- Costco Return Policy: 5 Things You Need to Know
- Why Buy Tires At Costco
I LOVE Costco and this card rewards, however will be canceling it. I get electronic statements and should receive a paper bill once a year that includes my coupon. I have not received this paper statement for the last 4 years. It takes time and many months to resolve this issue EVERY YEAR. I am in the middle of it, yet again.
Here’s another thing to watch out for that’s related to the point made in the article that the AMEX True Rewards card is automatically canceled if you do not renew your Costco membership: this can result in a hit to your credit score, which can can affect other things, some very significant in your life, such as the rates you pay for auto and homeowner’s insurance and your ability to get a new job or rent a new apartment, or the interest rate you would pay for a new mortgage or auto loan.
Your credit score will drop when you or AMEX cancels your True Rewards card. The amount it will drop will depend on a couple of additional factors: how long that account has been open, particularly in relation to your other active credit accounts–if it’s your oldest or only credit card and has been open for ten or more years, your credit score could drop significantly. It also depends on how much available credit AMEX specified the account had compared to your other sources of available credit. If you have a total of $20,000 in available credit on credit cards, but half of that is tied up in True Rewards and that account is closed, your credit score will take a significant hit. These factors apply to ANY major credit card account that gets closed–it’s just that those accounts are not tied to something like a Costco membership.
So I guess there are two takeaways for this: make sure you like Costco before you take out a True Rewards card, and don’t let the percentage of available credit on this particular card get too high in relation to your other available credit from other credit cards. (If this card has a $3000 limit and you have other cards with $50,000, and they’re all older accounts than this one, then losing this card will have little effect on your credit score or other things tied to that like auto insurance rates.)