There are several great Costco credit cards. Here are the main factors to consider when choosing the best credit card for Costco, starting with the most important.
Rewards rate at Costco
As you might expect, the first thing to look at is how much a card earns at Costco. If Costco is one of the places where you spend the most, aim for 2% to 3% back. Those are the highest rates I've tracked down at Costco, including with its own store credit card.
Some cards earn bonus rewards at Costco specifically, while others earn bonus rewards at warehouse clubs as a whole. Just know that gas and groceries credit cards usually don't earn any extra at Costco. Most card issuers don't consider warehouse clubs to be grocery stores. So if a card earns 3% at grocery stores, that doesn't necessarily mean it will earn 3% back at Costco.
Redemption options
Most of the best Costco credit cards are cash back cards. With these, you can typically redeem your rewards as cash back toward your credit card bill or a deposit into your bank account. There are also some travel rewards cards that earn high rates at Costco. If you like to travel, then you may want to go with one of these cards.
Whichever type of card you choose, check how you'll be able to redeem your rewards. Make sure the redemption options work for you.
Annual fee
Most credit cards for Costco are also no annual fee cards, so if you're trying to keep costs down, it shouldn't be too difficult. But if you go with a travel card, many of them have annual fees. In that case, it's important to figure out if the perks of the card are valuable enough to justify the cost.
Rewards rate on the rest of your spending
Even if Costco is your store of choice and you have a closet full of Kirkland clothes, you probably spend money elsewhere, too. So don't disregard what the cards you're considering will earn on the rest of your spending.
Some rewards cards earn the same rate, such as 2% back, on all types of purchases. These can work well for just about anyone. There are also rewards cards with bonus categories, such as gas stations or restaurant purchases. You may want to go with one of these if the bonus categories are a good fit for your spending habits.
Additional benefits
Many credit cards have other features in addition to the ones already mentioned. For example, some have welcome offers, such as $200 if you spend $1,000 on purchases in the first 90 days. If you're having trouble deciding between two cards, a welcome offer can be a useful tiebreaker.
Another common perk is a 0% intro APR. Not everybody needs this, but if you expect to pay off purchases over time, then a card with a 0% intro APR could help you avoid interest charges.