Advertisement
Customers can use any Mastercard at Costco check-outs. We break down if Costco’s store-branded card is really the best option for frequent shoppers.
Costco is a popular shopping destination for Canadians who want deep discounts on bulk buys. The catch? Costco requires you to have a membership to shop there, and that costs either $65 per year (for a Gold Membership) or $130 per year (for an Executive Membership). Costco’s also pickier than most retailers when it comes to credit cards. For example, you can only use Mastercards when cashing out in person or fuelling up on gas at Costco stations.
If you frequently shop at Costco, you’ve likely noticed ads for the CIBC Costco Mastercard. This no-fee credit card doubles as your membership card and offers rewards on your Costco purchases. But is it the best credit card for frequent Costco shoppers? Read on to learn more about the CIBC Costco Mastercard, and find out how you might earn even more rewards with a few alternative credit cards.
Annual fee: $0
Welcome offer: This card does not have a welcome bonus at this time.
Card details
| Interest rates | 20.75% on purchases and 22.49% on cash advances |
| Income required | $15,000 per year |
| Credit score | 560 or higher |
The CIBC Costco Mastercard is a no-fee cash back card (just like its predecessor, the Capital One Costco Mastercard). It offers 3% cash back at restaurants and Costco gas stations, 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 other purchase categories, you’ll earn 1% cash back (including in store at Costco).
This card also comes with mobile device insurance, with up to $1,000 of repair or replacement coverage when you charge or finance the mobile device on your card. With certain eligible purchases, you can also get security insurance and extended warranty insurance. If you meet certain requirements, like having a person income of over $50,000 per year, you may qualify for the CIBC Costco World Mastercard. It’s essentially the same card, but includes World Mastercard benefits like car rental insurance, travel perks and more.
While the CIBC Costco Mastercard has no annual fee, to truly reap the card’s benefits, you need have to have a Costco membership, which costs either $60 or $120 per year. Another point: there’s no limit on how much you can earn throughout the year. But, the cash back earn rate does come with a cap. When you reach your annual spend in a category, you’ll still earn cash back—it will just be at the 1% rate for the remainder of the calendar year. 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 charged. After that, you’ll earn the 1% cash back rate. For Costco.ca purchases, the cap is $8,000. After that, you return to the 1% base rate.
And while some cards pay out cash back earnings monthly, straight onto your statement or into your savings account, the CIBC Costco Mastercard gives them to you in the form of gift certificates, issued in January, that you can redeem at Costco.
You can only use Mastercard credit cards when shopping in Costco stores in Canada. (In the U.S., the opposite is true: You can only use Visa credit cards.) However, Visa credit cards are accepted online at Costco.ca. The wholesale retailer accepts other forms of payment as well. See below for a breakdown by point of sale.
Yes. A foreign transaction fee of 2.5% applies to any purchase in a foreign currency. The fee is charged by CIBC, not Costco. To save on this cost, you could have a no foreign transaction fee credit card in addition to your Costco credit card.
No. The CIBC Costco Mastercard only includes extended warranty, purchase protection and mobile device insurance. These three types of insurance are fairly standard for no-fee credit cards. If you want travel insurance, consider a travel credit card.
Yes, but not as a bonus category. With Mastercard, you typically earn at the card’s base rate (the rate given for “all other purchases”). This is due to the way Mastercard categorizes spending at Costco (grocery purchases at the store are considered ”wholesale club” purchases). Similarly, when using a Visa credit card on Costco.ca, you will only get at the base earn rate on your card.
No. The CIBC Costco Mastercard doesn’t have an annual fee. To be eligible, you must be a Costco member, which costs $60 or $120 per year, depending on the type of membership you choose. That said, the CIBC Costco Mastercard does double as your membership card, so you don’t have to worry about carrying both in your wallet.
On March 4, 2022, Costco officially made the switch from the Capital One Costco Mastercard to the CIBC Costco Mastercard. The Capital One card is no longer issued nor accepted.
On Sept. 1, 2024, Costco membership fees in Canada increased. The cost of Gold Star memberships rose $5 per year (from $60 to $65 annually) and the cost of Executive memberships rose $10 per year (from $120 to $130 annually). Also, for Executive members, the maximum annual 2% reward increased from $1,000 to $1,250.
Knowing these three things can help you pick a good credit card and maximize your rewards at Costco.
And why shouldn’t they be? You may think this is an obvious point that has no real impact on your spending strategy at Costco. And yet it’s probably the most important factor to keep in mind when selecting a Costco credit card. Each credit card network uses merchant codes to determine how purchases are categorized—and, crucially, whether they fall within a rewards bonus category.
With Mastercard, your Costco purchases are “coded” as “wholesale club.” This means your Mastercard with a high earn rate on groceries, for example, might not be rewarding you that well at Costco. Although the BMO CashBack Mastercard offers 3% cash back on groceries, for example, you earn only 0.5% on grocery purchases at Costco, which is 0.5% less than with the CIBC Costco Mastercard.
With this in mind, there are two ways to maximize your rewards when shopping in Costco stores. You can either find a Mastercard with a high earn rate on all purchases (including those at a wholesale club), or find a card that has wholesale club spending as a bonus category. Rogers Red World Elite Mastercard is a good example of the former. There are notably few examples of the latter, but the BMO Air Miles World Elite Mastercard recently became one.
Do you carry a Visa? Good news: You can already shop online at Costco.ca. (See below for a breakdown of accepted payment methods by point of sale.) And if you’d rather not apply for a new credit card just so you can check out in Costco warehouses, there’s a way around the company’s Mastercard-only rules for in-person shopping—it just requires a few extra steps.
Go to Costco.ca and purchase a Costco Shop Card using your preferred Visa credit card. You can buy Costco Shop Cards in denominations of $50 to $2,000, and the cards can be used in stores and online. While only Costco members can purchase Costco Shop Cards, they can be redeemed by non-members in Costco locations, so long as the person gets a one-day shopping pass for non-members at the membership counter. So, in practice, you can buy a $1,000 Costco Shop Card online for yourself (or a friend or family member who isn’t a Costco member) using your Scotia Momentum Visa Infinite, for example. The transaction would earn you $10 in cash back rewards.
This explains why we’ve included a few of the best Visa credit cards in Canada as viable alternatives to the CIBC Costco Mastercard. Note: Costco doesn’t accept American Express cards, period—so you’ll need a Visa for this to work.
Costco currently has two membership tiers: a base-level Costco Gold Membership ($65 per year) and a higher-tier Costco Executive Membership ($130 per year). There’s also a Costco Business Membership ($65), which allows you to buy items for business, personal and resale use. Executive members earn a 2% reward on purchases made by the primary and additional cardholders, on the first $62,500 spent annually (for a maximum annual reward of $1,250). Some exclusions apply. Given that they will receive 2% back on many Costco purchases, upgrading to an executive level may be worth it if you spend more than $3,500 per year at Costco—you’d earn $70 in rewards, enough to offset the costs of the upgrade. Note: Executive membership rewards are only issued as gift certificates that can be redeemed in physical warehouses—they’re not true cash.
| Our top pick | Your spending personality |
|---|---|
| Rogers World Elite Mastercard Annual fee: $0 | You want cash back |
| BMO Air Miles World Elite Mastercard Annual fee: $120 | You collect Air Miles |
| Scotia Momentum Visa Infinite Annual fee: $120 | You want cash back from a Visa credit card |
| TD Aeroplan Visa Infinite Card Annual fee: $139 | You want travel points from a Visa credit card |
At a glance: On in-store Costco purchases, the Rogers Red World Elite delivers 1.5% cash back on every dollar spent—a full 0.5% more than the CIBC Costco Mastercard. Even better, if you’re a Rogers, Fido or Shaw customer, you’ll earn at a boosted rate of 2% on all purchases. The card’s flat-rate rewards structure means you won’t have to worry about missing out on bonus categories.
Annual fee: $0
Welcome offer: This card does not have a welcome bonus at this time.
Card details
| Interest rates | 20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers |
| Income required | $80,000 per year |
| Credit score | 725 or higher |
Pros
At a glance: For Costco shoppers, the BMO Air Miles World Elite Mastercard just got an upgrade. Thanks to changes introduced by BMO in July 2024, the card now offers 2 Miles per $25 spent at wholesale stores, including Costco and Walmart. Given the approximate value of 1 Air Mile ($0.121), that gives you just under 1% back in travel rewards on purchases at these stores. No other Mastercard offers a bonus rate on Costco purchases—not even the CIBC Costco Mastercard.
Annual fee: $120
Welcome offer: Earn 3,000 Air Miles bonus Miles ($310 value). Plus, get the $120 annual fee waived for your first anniversary.
Card details
| Interest rates | 20.99% on purchases, 23.99% on cash advances, 23.99% on balance transfers |
| Income required | Personal income of $80,000 or household income of $150,000 |
| Credit score | 760 or higher |
| Point value | 1 Dream Mile = $0.0121 on average when redeemed for travel. 1 Cash Mile = $0.105. |
Pros
Cons
At a glance: If you don’t want a Mastercard just to shop at Costco, you still have options. The wholesale retailer accepts Visa credit cards online at Costco.ca. With the Scotiabank Momentum Visa Infinite, you’ll get 1% cash back for your online purchases. Although it offers a much better 4% cash back on grocery purchases made at other stores, the 1% is still better than many other cash back credit cards. The CIBC Dividend World Elite and BMO CashBack Mastercard World Elite come with the same 1% earn rate on online purchases.
Annual fee: $120
Welcome offer: Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Offer ends June 30, 2025.
Card details
| Interest rates | 20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers |
| Income required | Personal income of $60,000 or household income of $100,000 |
| Credit score | 725 or higher |
At a glance: Aeroplan is one of the most best travel loyalty programs in the country. And the TD Aeroplan Visa Infinite will net you 1 Aeroplan point per dollar spent online at Costco.ca. Considering each point is worth an average of $0.02 when redeemed for travel, this card provides a roughly 2% return on your spending—more if you’re buying gas and groceries from somewhere other than Costco.
Annual fee: $139 (waived first year)
Welcome offer: Earn up to $1,500 in value, including up to 50,000 Aeroplan points and no annual fee for the first year. Conditions apply. Account must be approved by Jan. 6, 2025.
Card details
| Interest rates | 20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers |
| Income required | Personal income of $60,000 or household income of $100,000 |
| Credit score | 680 or higher (recommended) |
| Point value | Aeroplan points are worth $0.02 on average. |
| Payment method | Point of sale |
|---|---|
| Mastercard | ✅ Costco warehouses ✅ Costco.ca ✅ Costco gas stations |
| Visa | ❌ Costco warehouses ✅ Costco.ca ❌ Costco gas stations |
| American Express | ❌ Costco warehouses ❌ Costco.ca ❌ Costco gas stations |
| Debit card | ✅ Costco warehouses ✅ Costco.ca (most PIN-based debit cards) ✅ Costco gas stations |
| Costco Shop Card | ✅ Costco warehouses ✅ Costco.ca ✅ Costco gas stations (physical cards only) |
| Cash | ✅ Costco warehouses ❌ Costco.ca ❌ Costco gas stations |
| Apple Pay | ✅ Costco warehouses ✅ Costco.ca ❌ Costco gas stations |
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Why Canadians are still feeling the squeeze of high food costs, and what to do about it.
The Trump effect and Trumponomics, Shopify’s huge earnings beat, it’s sunny days for Suncor shareholders and more.
Each of these cards offers a suite of features to help you worry less on your next trip, from...
From redeemable points to cold hard cash, these credit cards offer big rewards on your everyday spending.
These cards offer super-low introductory rates for balance transfers.
Whether you’re looking for points or cash back, these cards will help you earn benefits from your fuel expenses.
Here’s how to get your free ticket to attend two MoneyShow virtual expos.
If you’re one of the many Canadians looking for Black Friday and Cyber Monday discounts, here’s how to know...
A new Desjardins report predicts rent inflation will slow in the next few years.
Why does CIBC COSTCO Mastercard treat a credit or purchase refund as a credit to your payments instead of a credit to the purchases you have made??
Upsets all my accounting.