Note: Sadly Costco and Amex announced in February 2015 that this card will be discontinued in March 2016.
The TrueEarnings Card from Costco and American Express is designed for people who have a Costco membership but want to get additional savings by receiving a percentage back on purchases made at Costco as well as everywhere else. This card requires no annual fee but you must have a Costco membership in order to be eligible to apply for it. If you already have a Costco membership this may not be a concern. But people who don’t routinely shop at Costco will need to sign up for a Costco membership before applying for the TrueEarnings Card from Costco and American Express.
Card members have the opportunity to earn 3% cash back on gas purchases at all US gas stations (including at Costco0. This spending amount is capped at $4,000 per year so any purchases above this only earn 1% cash back. Eligible travel purchases, including those made at Costco, and U.S. restaurant charges earn 2% cash back while all other qualifying purchases (including all Costco purchases) earn 1% cash back. This 1% back is in addition to the 2% you get back annually from Costco with an Executive Membership (currently $110 per year with the annual reward capped at $750).
New cardholders receive a 0% introductory annual percentage rate on purchases for the first six billing cycles. After that time, the APR will be 15.24%. This is a variable rate based on the Prime Rate. There is no actual signup bonus in the way of points or cash back.
Card members also receive additional benefits through American Express such as:
- Global Assist Hotline
- Car Rental Loss and Damage Insurance
- Roadside Assistance Hotline
- Entertainment Access
- Extended Warranty
- Purchase Protection
There is a foreign transaction fee of 2.7% associated with the TrueEarnings Card from Costco and American Express. This is applied to the total price of every purchase made on the card outside of the U.S. If you often travel internationally, you might want to consider other rewards cards which do not charge this fee.
The Facts
Below we have broken down the specific details of the TrueEarnings Card from Costco and American Express to help you decide if it’s the right card for you.
The Good:
No annual fee with paid Costco membership:
There is no annual fee for the TrueEarnings Card from Costco and American Express but you must have a Costco membership to be eligible for this card. Another plus is that you can add additional card members to your account at no charge. This means you earn cash back on their purchases also. Costco offers different levels of membership ranging in price from $55 to $110 per year.
Introductory APR:
There is no actual signup bonus as far as points or cash back. However, new account holders receive a 0% introductory annual percentage rate on purchases for the first six months of activation. After that time, the APR will be 15.24%. This is a variable rate based on the Prime Rate.
Different ways to earn cash back rewards:
Card members can earn cash back rewards in the following ways:
- Gas purchases- Earn 3% cash back at U.S. gas stations and at Costco gas locations. The spending amount is capped at $4,000 per year with all purchases above that amount earning a 1% cash back
- S. restaurant purchases- Earn 2% cash back at all U.S. restaurants.
- Travel purchases- Earn 2% cash back on eligible travel purchases, including those made at Costco.
- Other purchases- Earn 1% cash back on all other eligible purchases including at Costco.
Additional Benefits from American Express:
In addition to earning cash back rewards with the TrueEarnings Card from Costco and American Express, cardholders receive the same excellent benefits that come with most American Express cards. These include:
- Global Assist Hotline- Emergency medical situations, legal questions, lost passports…you hope these scenarios will never happen while traveling but, in reality, they sometimes do. The Global Assist Hotline is available to card members 24/7 to help in dealing with problems such as these.
- Car Rental Loss and Damage Insurance- When you use your TrueEarnings Card from Costco and American Express to reserve and pay for your entire eligible car rental, you can be covered in the unlikely event your car is damaged or stolen. You must decline the collision damage waiver.
- Roadside Assistance Hotline- Card members can call this hotline 24/7 whenever there is an emergency vehicle situation such as a dead battery or flat tire. This service will coordinate service and assist you in getting on your way quickly and safely. All third-party costs are your responsibility.
- Entertainment Access- The TrueEarnings Card from Costco and American Express gets cardholders access to various entertainment events. These include early ticket sales and priority seating to sporting events and concerts as well as movie and theatre tickets.
- Extended Warranty- Get up to one additional year on eligible purchases. Important restrictions and exclusions apply.
- Purchase Protection- Eligible purchases made with the card can be protected against theft or accidental damage for up to 90 days from the date of purchase. Again, restrictions and exclusions apply.
The Bad:
Foreign transaction fees:
Card members are charged a foreign transaction fee of 2.7% on the total amount of every purchase made outside of the U.S. While that may seem like a small fee on the surface, if you often travel abroad and plan to use the card for hotels, car rentals, and other purchases, the total amount of fees you may be charged can be substantial. You might want to consider other rewards cards which do not charge this fee to their cardholders.
Costco membership required:
There is no annual fee for the TrueEarnings Card from Costco and American Express. However, you must have a Costco membership to be eligible to apply for the card and you must maintain your Costco membership once you are approved. Failure to do so will result in the closing of your TrueEarnings Card from Costco and American Express and any rewards you currently have will be forfeited.
The Ugly:
Cash back received as an annual coupon:
Card members receive the cash back rewards in the form of a coupon which is attached to your February statement every year. The rewards coupon is redeemable at any Costco location throughout the U.S. but it must be redeemed by the end of August in the year it is issued or else your reward will be null and void. Compared to other rewards cards which offer card members day-to-day access to their cash back rewards, once-a-year redemption and a coupon are a hassle. This rewards coupon is in addition to the annual ‘2% back’ coupon you get from Costco with an Executive Membership (currently $110 per year).
Capped bonus amount:
The 3% cash back bonus on gas purchases is very competitive but the total amount you can spend is also capped at $4,000 annually. You do receive 1% cash back on any amount you spend over that but you should consider the diminished rewards if you think your gas expenditures will go over $4,000 per year.
Approval not guaranteed:
Not everyone who has a Costco membership will qualify for the TrueEarnings Card from Costco and American Express. Applicants generally need to have good to excellent credit (740 FICO score and above) and meet the credit guidelines which are set by American Express.