CIBC Costco Mastercard review

How the Costco Mastercard earns

The best rates aren’t inside the warehouse. Restaurants and Costco gas stations earn 3% cash back, other gas stations and EV charging earn 2%, Costco.ca online purchases earn 2%, and everything else, including in-warehouse Costco shopping, earns 1%. There’s no limit on the total cash back you can earn.

For example, a household that spends $300 a month at restaurants, $200 at Costco gas, $100 on Costco.ca and $600 in the warehouse earns $9, $6, $2 and $6 respectively. That’s $23 a month, or $276 a year, with no fee to subtract.

How you get your cash back

Cash back isn’t paid monthly. It’s issued once a year as a gift certificate that you redeem at Costco warehouses, so it works best if you shop at Costco regularly. If you let your membership lapse, check the terms on how that affects the card and your rewards.

The card also doubles as your Costco membership card, so you carry one card instead of two, and you can add up to 3 additional cards at no cost.

Pace It installment plans

For bigger Costco purchases, the card offers special Pace It installment rates with no installment fees: 5.99% for 6 months, 6.99% for 12 months and 7.99% for 24 months.

Those rates are well below the card’s 21.75% purchase rate, so if you need to spread out the cost of a large purchase, an installment plan costs far less than leaving the amount on your regular balance. Check the eligibility rules before you buy.

Fees, interest and the fine print

There’s no annual fee, but you need an active Costco membership to get and keep the card. Purchases in a foreign currency carry a 2.5% fee, so $1,000 spent abroad or with a US website adds about $25.

Regular purchases are charged 21.75% interest and cash advances 22.49%. Paying your statement in full by the due date avoids purchase interest, which matters because a single month of interest on a balance would outweigh the 1% you earn in the warehouse.

Insurance coverage

The coverage includes mobile device insurance, which is a useful extra on a card with no annual fee, plus protection for items you buy. Check the certificate for limits, deductibles and exclusions.

• Mobile device insurance
• Purchase security and extended warranty

Who it suits, and who should look elsewhere

The card suits Costco members who eat out often and fill up at Costco gas, since those are the 3% categories. It’s also convenient to carry one card that works as both your membership card and your payment card at the warehouse.

If most of your Costco spending happens in the warehouse, you’re earning only 1% there. And if you’d rather have cash back you can spend anywhere, the once-a-year gift certificate may feel restrictive.

How it compares

The Simplii Financial Cash Back Visa Card also has no annual fee and earns up to 4% on restaurants, bars and coffee shops, so it can earn more on dining. It runs on Visa rather than Mastercard.

The BMO CashBack Mastercard is another no-fee Mastercard, earning 3% on up to $500 of groceries a month with a welcome offer of up to $125 cash back. It’s the better fit if groceries, rather than restaurants and gas, are your biggest category.

Before you apply

The recommended credit score is 660 or higher, but CIBC makes the final decision based on your full credit profile. You’ll need an active Costco membership. Confirm the current terms on CIBC’s website before you apply.