Tag: Costco

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Costco is Raising the Cost of Membership Fees — Here’s How Much More You’ll Pay

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

 

For the first time in six years, Costco will hike the cost of its annual membership fee for individuals and businesses. The increased prices will go into effect June 1, 2017, the wholesale retailer announced on Thursday.

The raise will affect about 35 million members.

Here’s how much more you’ll be paying for your Costco membership:

Primary Costco Members

“Primary” Costco members (both individuals and businesses) pay $5 more, bringing the cost of an annual membership to $60.

Executive Costco Members

Members at the “Executive” tier, who earn 2% cashback on their purchases for the year, among other perks, will see their annual membership fee rise by $10 to $120. Executive members also receive discounts on Costco Services such as check printing, identity theft services and roadside assistance.

Perhaps to dull the sting of the higher membership fee, Costco has decided to raise the cap on the amount of cashback executive members can earn each year — from a maximum of $750 to $1000.

How to save on Costco shopping

Costco membership fees might be going up soon, but Costco members can recoup some of the lost funds in savings by using certain credit cards.

Costo’s Anywhere Visa card is a good option for frequent shoppers. The card has no annual fee and earns better rewards than its predecessor, including 2% back on Costco purchases, 4% on gas, 3% on restaurants and 1% on everything else.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Why Costco Dumping American Express May Mean Better Rewards

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Costco and American Express announced the end of their nearly 10 year arrangement that allowed American Express to be the only credit card accepted for payment in Costco stores.

Soon, we will hear which credit card Costco will join forces with when the deal expires next year.

While some American Express cardholders are upset by this, it may be a blessing in disguise.

Case in point, the Costco TrueEarnings American Express card.

It’s heavily marketed to Costco members (some even think it’s the only card you can use in Costco stores, which is not true – any American Express can be used).

And it has some enticing rewards, like…

  • 3% cash back on gas
  • 2% cash back on restaurants and travel purchases
  • 1% cash back on everything else

Those were market leading rewards about 10 years ago, but the reality is the market for cash rewards has become more competitive. And sticking with Amex has meant sub-par rewards for Costco members.

For gas you can get better than 3% cash back rewards from several cards, including the PenFed Platinum Cash Rewards at 5% and Fort Knox Federal Credit Union Visa at 5%.

And for overall spending the Citi Double Cash is a MasterCard that earns 2% cash back on everything you buy. Though today Costco members can use the Fidelitly American Express which earns 2% cash back on all purchases.

The losing proposition would be if Costco switched to Discover.

At the moment it only offers one rewards card, the Discover It, with a confusing array of limited 5% cash back categories each quarter, that often involve merchants that compete with Costco.

Discover management did note on its recent earning conference call it is developing another rewards product, which may have better appeal to affluent customers.

But even if it did launch a new card, Discover would still have significantly fewer reward choices for Costco members than American Express did, or Mastercard or Visa can offer.

So if you’re a Costco member, hope it signs a full deal that allows you to use a range of MasterCard or Visa cards, much like at Sam’s Club where MasterCards are all accepted.

In Canada, Costco stopped accepting American Express, and allowed Capital One to issue a Costco-branded credit card, while also allowing any MasterCard network card to be used for purchases. A deal like that would be a win for members.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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