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Now that all Mastercards are accepted when shopping at Costco, the Capital One Costco Mastercard isn’t the only game in town. (Go ahead, see the best alternatives below.)
In fact, there’s a lot of choice out there, as any Mastercard can be used at Costco.
The truth is, you can often get MORE cash back or travel rewards with a top Mastercard than you can with the official Costco Mastercard.
- Capital One Costco Mastercard review
- 5 best Costco credit card alternatives
- Costco Mastercards head to head
- How to apply for a Costco credit card
- Costco credit card FAQ
Capital One Costco Mastercard review
|Type of reward:||Store rewards, specifically the Costco rebate coupon|
|Reward details:||* 3% back at restaurants
* 2% back at gas
* Up to 1% on all other purchases
|Average rate of return %:||1.18%|
|Purchase interest rate:||19.75%|
3 Capital One Costco Mastercard pros
There are 3 things we like about the Capital One Mastercard.
1. High earn rates on restaurants and gas
For a credit card with no annual fee, this card has high earn rates for both restaurants and gas.
On these purchases, you’ll earn:
- 3% on restaurants, and
- 2% on gas.
Your rewards will add up quickly if you spend quite a bit eating out or getting gas.
2. Complimentary insurance coverage
The insurance coverage is also comprehensive when compared to other no annual fee cards.
You’ll get 6 types of insurance coverage included:
- Extended warranty (up to 2 years instead of the usual 1)
- Purchase protection (120 days instead of the usual 90)
- Price protection
- Travel accident (up to $250,000)
- Baggage delay (up to $300)
- Rental car theft & damage
The price protection is quite notable, and not many credit cards in Canada include it. In fact, only 6% of credit cards we track include it.
3. Doubles as your Costco membership card
You’ll be able to leave your Costco membership card at home if you have this credit card. That’s because it doubles as your membership card, picture and all, saving some room in your wallet.
4 Capital One Costco Mastercard cons
There are also some things we don’t like about the Capital One Costco Mastercard.
1. Base earn rate not as good as advertised
The base earn rate is less than what you can find on other no fee cards, and the marketing language makes it seem better than it is. It says you earn up to 1% back on all other purchases.
That “up to” part? The Capital One Costco Mastercard only earns 0.5% cash back on the first $3,000 in annual non-category spend, before jumping up to 1%. That means you’ll get $15 less than what you would be earning if the rate was just a flat 1%.
2. No special earn rates for shopping at Costco
Despite the fact it’s a Costco branded credit card, there’s no special earn rate when shopping at Costco.
Meaning, you’ll be earning between 0.5% to 1% on your Costco purchases with this card. That’s not that great considering top flat rate cash back credit cards will get you 2% back on all your Costco purchases.
3. Rewards paid out once per year as a Costco rebate coupon
Your rewards are only paid out once per year, and can only be used at a Costco warehouse in the form of a rebate coupon at the cash register.
There is the option to go to Costco and exchange it for cash if you like.
4. Not a real cash back credit card
Since your rewards are paid out as a Costco rebate coupon, the Capital One Costco Mastercard isn’t a real cash back credit card. That means you’re losing out on a major perk of cash back cards – the convenience of using your rewards on anything you buy. With this card, you’re limited to Costco purchases unless you go through the hassle of getting your coupon converted to cash at the store.
5 best Costco credit card alternatives in Canada
So what are your Mastercard alternatives for shopping at Costco?
Here are the top 5 Mastercards to use at Costco that will earn you between 1% and 2% cash or travel rewards on ALL your purchases (in any store), or save you big money on interest rates.
|Category||Credit Card||Average Earn Rate %||Annual Fee||Apply for Card|
|Best Mastercard for gas and groceries||MBNA Platinum Plus Rewards Mastercard||1.35%||$0||Apply|
|Best no fee cash back Mastercard||Brim Mastercard||1.3%||$0||Apply|
|Lowest permanent interest rate||HSBC +Rewards Mastercard||0.53%||$25 (first year rebate)||Apply|
|Best for collecting Air Miles||BMO AIR MILES World Elite Mastercard||2.12%||$120 (first year free)||Apply|
|Best cash back Mastercard||Brim World Elite Mastercard||2.25%||$199 (first year free)||Apply|
1. Best Mastercard for gas and groceries
To get a high rate of return on gas and groceries (as well as restaurants), look no further than the
You’ll be raking in the points at these rates:
- 2 points per $1 spent on gas, groceries, and restaurants (up to $5,000 spent in each category), and
- 1 point per $1 spent everywhere else.
An MBNA Rewards point is worth 1 cent when redeemed for travel, a return of up to 2%, but no less than 1%.
It even has a good welcome bonus. Earn 5,000 bonus points when you spend $500 in the first 3 months, and another 5,000 bonus points when you enroll for e-statements in the first 90 days. Plus, you also earn 4 points per $1 spent on gas, groceries, and restaurants in the first 90 days.
There’s also a well rounded insurance package included, with 7 types provided, including all 3 types of rental car insurance coverage. Not many no fee credit cards come with this level of coverage.
2. Best no fee cash back Mastercard
Want to earn cash back but save on the annual fee?
With the Brim Mastercard, you’ll earn 1% cash back on every purchase you make, with no caps, tiers, or categories to worry about.
And there’s more to this card than just no fees and a high flat earn rate. You’ll enjoy no foreign exchange fees, earn bonus rewards when shopping online at Brim’s retail partners, and get 5 types of insurance coverage.
To top it off, it has a low income requirement of $15,000 personal.
3. Lowest permanent interest rate
Need to save money on credit card interest rates? The
For rewards, you’ll earn:
- 2 points per $1 spent on dining and entertainment, and
- 1 point per $1 spent on all other purchases.
You’ll also get 20,000 bonus points after spending $2,000 in the first 6 months.
An HSBC Rewards point is worth 0.5 cents each when redeemed for travel, for a return of between 0.5% and 1% on your purchases.
And while that’s not as much as the other cards discussed, you’re gaining permanent low interest rates as well. This card has a standard interest rate of 11.9% on purchases, cash advances, and balance transfers. That’s much better than the typical 20% rate most credit cards charge.
If you tend to carry a balance, this credit card will save you on interest, for a low annual fee of $25.
4. Best Mastercard for collecting Air Miles
For the AIR MILES collector, the
As our top rated AIR MILES credit card, you’ll earn 1 mile for every $10 spent.
It also comes with a great 2,000 mile sign up bonus worth about $404 when redeemed for flights and a BMO exclusive 15% discount on the miles required to book an economy class flight with AIR MILES.
Packaged in there is one of the top travel insurance packages of any travel credit card in Canada, giving you 14 out of
Finally, you get a complimentary membership for Mastercard Airport Experiences provided by LoungeKey and 2 free lounge passes that gives you access to some of the best airport lounges worldwide.
To get maximum value for your AIR MILES, you’ll need to redeem them for flights which do have highly variable value. If you choose AIR MILES Cash as your reward choice, you’ll get a value of 10.5 cents for each mile. But, if you look for reasonably high value flights, you should be able to score a higher value in the range of 17.2 cents.
For an annual fee of $120, that’s currently waived for the first year, there’s a lot to love with this card.
5. Best cash back Mastercard
The best cash back card for Costco right now is the
You’ll get 2% cash back on everything until you earn $500 with this card (then 1% on everything after that). And you can earn up to $500 in bonuses after you make your first purchases with participating retailers.
Beyond that, it also comes with some great perks that aren’t found on many credit cards. Shop at any of Brim’s 150+ retail partners, and you can earn some serious rewards on your purchases – anywhere from 3% to 30%.
You’ll also enjoy no foreign exchange fees on all purchases, saving you 2.5% every time you use the card in a foreign currency.
As for insurance? One of the best packages out there. The card comes with 15 types of insurance ‒ more than double the Capital One Costco Mastercard’s package ‒ including rare mobile device insurance and even rarer event ticket coverage.
The card isn’t without its drawbacks. The annual fee is quite high at $199 (though keep in mind its First Year Free offer), and it has steep income requirements of either $80,000 personal or $150,000 household.
Want to see the top 5 no Mastercards available? Here are some other cards to consider.
Costco Mastercards head to head
Average rate of return % at a glance
Here’s how all 6 cards stack up when it comes to rewards:
The Capital One Mastercard only beats out one card – the HSBC+ Rewards Mastercard, but keep in mind this HSBC card also has permanent low interest rates.
Each of the other 4 cards have a minimum earn rate of at least 1% on every purchase, giving you increased flexibility over the Capital One Mastercard.
Both Brim Mastercards see an additional boost in their earn rate courtesy of earning extra rewards when shopping with their multitude of partners.
Annual fee at a glance
These 6 Mastercards have annual fees ranging from $0, all the way up to $199.
Both of the other no annual fee cards offer higher rewards than the Capital One Costco Mastercard.
And even though 2 of the cards have an annual fee of $120 or more, they’re also both first year free, so you can try them out for a year without paying a fee.
How to apply for a Costco credit card
So how can you apply for these, or any Mastercard?
There’s a few ways you can do so.
For the Capital One Costco Mastercard, you can’t apply in-store for the card, applications are only accepted online.
If you’re looking at a card from a big bank, you can apply in person at your local branch.
Though the most convenient way (and the only way for many of the cards listed here) is to apply online. For every card mentioned here (except for the Capital One Mastercard), you can use our apply links, and get taken to the bank’s website where you can complete an application.
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Income requirements at a glance
Many Canadian credit cards have minimum income requirements to be able to apply.
Here are the requirements side-by-side for each credit card.
For most of the cards discussed, there’s either no income requirements, or a small one that most working Canadians can reach.
That said, both World Elite Mastercards do have high income requirements of either $80,000 personal or $150,000 household, which can put these 2 cards out of the range for many Canadians.
Costco credit card FAQ
What credit cards does Costco Canada accept in store?
Costco exclusively accepts Mastercard branded credit cards at their warehouses in Canada. Surprisingly, in the USA, they exclusively take Visa and not Mastercard. Costco also accepts debit cards for payment.
What credit cards does Costco Canada accept online?
Shopping online at Costco.ca is not the same as shopping in-store. For online purchases, Costco accepts both Mastercard and Visa credit cards. That said, Costco no longer accepts American Express cards – even online.
Is the Capital One Costco credit card a good deal?
The Capital One Costco Mastercard exclusively for Costco members isn’t a bad deal because it gives you decent rewards for a no fee credit card and doubles as your Costco membership card reducing the clutter in your wallet.
On the flip side, you’ll only earn between 0.5% and 1% on your Costco purchases. There are credit cards in Canada (both premium and no fee) that can earn you between 1% and 2% cash back on all your purchases anywhere, including Costco. With the Costco Mastercard, you’re also locked into redeeming your “cash” rewards in-store, whereas other cards let you get your cash as a statement credit or even a cheque or direct deposit.
Does Costco count as a grocery store?
Many credit cards offer more rewards on grocery store purchases and many Canadians consider Costco to be a grocery store. Unfortunately, Costco is not categorized as a grocery store by the Mastercard network and therefore purchases made there are not eligible for grocery bonuses. In fact, there is no credit card bonus spending category that Costco qualifies for at all.
How can I find the best credit card for me?
Our creditcardGenius Challenge can help you find the best credit card for you. Complete our 3 minute quiz, and we’ll let you know what your best credit cards. And if we do, you’ll be able to refer friends and receive up to $25.