Review: the new CIBC Costco Mastercard. Is it really the best credit card to use at Costco?

Find your next credit card. What kind of credit card are you looking for? Find the best cards for you in less than 2 minutes on ratehub.ca. Let’s start. You are leaving MoneySense. Just close the tab to return.

Does Costco Take Visa?

New. In fact, until 2014, the only credit card accepted by Costco was a store-branded American Express. Unless you had that card with you, you would have to pay cash at the register, which makes the shopping experience clunky and clunky. This deal changed in 2015 when Costco partnered with Mastercard instead. Overall, this was seen as an improvement: American Express isn’t accepted nearly as many places as Mastercard.

Today, in addition to cash and debit cards, Canadians can pay for their Costco purchases with any Mastercard. Previously, the store had one branded credit card: the Capital One Mastercard for Costco members. But as of March 2022, that partnership ended and CIBC acquired the existing Canadian Capital One Costco Mastercard portfolio and became the exclusive issuer of Costco credit cards in Canada.

So, is the new CIBC Costco Mastercard the best to use in-store? What are the alternatives? What happens if you have the Capital One Mastercard? Read on to learn the details of the CIBC Costco Mastercard and learn about seven of the most compelling alternatives.

What will happen to my Capital One Costco Mastercard card?

If you are a cardholder of the Capital One Costco Mastercard, don’t worry. Essentially, all eligible Capital One Costco cards will be transferred to the new CIBC Costco Mastercard. Your CIBC card should arrive by August 31, 22, but you can continue to use your Capital One card in the meantime.

Once your new CIBC card is activated, you (and any authorized users) will no longer be able to use the Capital One Costco Mastercard. All your previous card details (such as card number and PIN) remain the same, as does your credit limit. Your pre-authorized payments should also not be interrupted. Read this to learn more about the transfer.

CIBC Costco Mastercard review

The new CIBC Costco Mastercard remains a no-fee cash back card, just like its predecessor, Capital One. But there are a few important changes. First, you earn 3% cash back at restaurants and Costco gas stations (the Capital One card gave 3% back at restaurants, but only 2% on gas). You also get 2% cash back at other gas stations, which is handy when you’re on the go, and 2% back when you shop at Costco.ca. For all your other purchase categories, you will earn 1% cashback (including at Costco). This card also comes with mobile device insurance, with up to $1,000 in repair or replacement coverage when you charge or fund the price of a mobile device on your card. Certain eligible purchases may also include security insurance and extended warranty coverage. If you meet certain requirements, such as an income of more than $60,000 per year, you may qualify for the CIBC Costco World Mastercard, which is essentially the same card but includes World Mastercard benefits such as car rental insurance, travel benefits, and more.

However, there are a few drawbacks. While there’s technically no annual fee, it’s worth noting that you must (obviously) have a Costco membership, which is over $60 a year, to really take advantage of this card’s benefits. One more point: there is no limit to how much you can earn throughout the year. But the cashback earning rate you receive comes with a limit. When you reach your annual spend in a certain category, you will still earn cash back – it will only be at the 1% rate for the rest of the calendar year in that category. For gas, you will receive the 3% cash back rate (and 2% cash back rate at other gas stations) only on the first $5,000. After that, you earn the 1% cashback rate. For purchases from Costco.ca, the cap is $8,000 before reverting to the 1% base rate. The way in which you can use the money back can also be considered a disadvantage. While some cards pay it out monthly, directly to your statement or savings account, the CIBC Costco Mastercard gives it to you in the form of gift cards, issued in January, that you can redeem for anything in the Costco warehouse.

While Costco’s official credit card offers benefits to Costco members, there may be other Mastercard products, all of which can be used at Costco, that better suit your needs. This card with no annual fee does not match the benefits of some cards that we will discuss below.

Annual Fee: $0 Interest Rates: Purchases 19.75%, Cash Advances, 21.49%, Balance Transfers 21.49% Earning Percentage: 3% cash back when you spend at restaurants and at Costco gas, 2% back at other gas stations and at Costco.ca, 1% on all other purchases (including Costco) Welcome Offer: Receive a $20 Welcome Bonus when you make a purchase with your card and register with the CIBC Mobile Banking App or CIBC Online Banking before December 31, 2022. Income Requirement: $15,000 Additional Benefits: Mobile Device Insurance and Extended Warranty Insurance. Your CIBC Costco Mastercard doubles as your Costco membership card, so there’s no need to carry both. You can also use the CIBC Pace It feature to create a payment term plan for Costco purchases.