Best Credit Card for Costco in Canada: The Mastercard-Only Math
This is a spoke of best credit cards in Canada. Grocery coding, which is a different problem from the warehouse, is the grocery card guide. A $0 fee is not automatically the highest return: the no-annual-fee guide and the cash-back guide are the comparison set. Cobalt's 5x rate does not apply inside a warehouse that will not take the card. That limit is spelled out in the Cobalt review.
- Warehouses, per Costco's help centre: Mastercard, debit, cash, Costco Shop Card, personal cheque, and Apple Pay. Gas: Mastercard credit and debit, other debit, and a physical Shop Card. No cash at the pump.
- Costco.ca: Mastercard, Visa, most PIN debit, and the Shop Card. A Visa grocery card can still be right for the website and wrong for the building.
- CIBC Costco Mastercard and CIBC Costco World Mastercard: $0 annual fee. The regular card publishes a $15,000 minimum income. World publishes $50,000 personal or $80,000 household. You must be a Costco member.
- Cash back is a certificate in January, redeemable at a Canadian warehouse, not a statement credit. The certificate has exclusions, including gas, the food court, and tobacco.
- The 1 percent warehouse rate is the number that matters for the cart. The 3 percent rate is restaurants and Costco gas, not the aisle.
What does the CIBC Costco card earn?
| Spend | Rate | Cap |
|---|---|---|
| Costco gas in Canada | 3 percent | Shares the gas and EV cap: 3 percent at Costco gas and 2 percent at other gas and at EV charging (MCC 5552) on the first $5,000 net a year, then 1 percent. Resets 1 January. |
| Other gas and EV charging | 2 percent, then 1 percent | The same $5,000. |
| Restaurants | 3 percent | No dollar cap in the footnote reviewed. |
| Costco.ca | 2 percent, then 1 percent | First $8,000 net a year, then 1 percent. Resets 1 January. |
| Warehouse merchandise and everything else | 1 percent | This is the cart. The World card's published income rule is higher. Confirm on the benefits guide if World's earn table differs before you assume it matches. |
| Annual fee | $0 | Up to three additional cards at $0 on the product page. |
| How you are paid | Certificate | Once a year, in January, for the prior calendar year, if the account and the membership are in good standing on 31 December. Redeemed at a Canadian warehouse, with exclusions. |
Purchase interest on the Costco cards overview page is 21.75 percent. Cash interest is 22.49 percent outside Quebec and 21.99 percent in Quebec. Interest still dominates 1 percent. Pay the statement in full.
Is 1 percent at the warehouse actually the best?
They spend $6,000 a year on warehouse merchandise, $1,200 at Costco gas, $800 at restaurants, and $400 on Costco.ca. On the CIBC schedule that is $60 on the warehouse (1 percent), $36 on Costco gas (3 percent, under the $5,000 gas cap), $24 at restaurants (3 percent), and $8 on Costco.ca (2 percent). Total: $128, paid as a January certificate, fee $0. If a different no-fee Mastercard paid a flat 2 percent on the same $8,400, it would pay $168 and might beat the certificate, including on the warehouse slice ($120 versus $60). This page does not assign that 2 percent to a named card, because a current flat rate that high was not what the issuer pages reviewed here showed for warehouse coding. Rogers Bank markets elevated cash back for Rogers customers on a no-fee World Elite Mastercard, which is a Mastercard and therefore works in the warehouse, and it still adds a 2.5 percent foreign markup. Confirm Rogers' Canadian-dollar base rate and any cap before you assume it beats 1 percent on the cart. PC World Elite is also a Mastercard and states 1 percent back in points on "everywhere else," which is the honest comparison for a warehouse that is not a Loblaw store: about the same 1 percent, in PC Optimum points instead of a Costco certificate.
Warehouse and Costco gas: Mastercard. Costco.ca: Visa is accepted, so a Visa grocery or cash-back card can be better online if its rate beats 2 percent and the purchase is inside that card's cap. Do not use Cobalt in the building. The travel rewards guide makes the same acceptance point for a different reason. If you are tempted to pay an annual fee for a richer base rate, run it through the annual-fee test on warehouse spend only.
Frequently asked questions
Does Costco Canada take Visa?
Not at the warehouse, on the payment list Costco published for Canadian warehouses. Costco.ca does list Visa. Gas stations list Mastercard, not Visa. Apple Pay at the warehouse still has to be a method Costco accepts, which means a Mastercard in that wallet, not a Visa riding Apple Pay.
Is the CIBC Costco card the highest earn rate inside the warehouse?
It is the card Costco and CIBC built for the membership, and the warehouse rate they publish is 1 percent. A different Mastercard with a higher base rate can win on merchandise. The 3 percent headline is restaurants and Costco gas. Run your own split before you collect a certificate for spend that another Mastercard pays as cash.
When do I receive the cash back?
CIBC says the certificate is issued once a year in January for the prior calendar year, to the primary cardholder, if the account is in good standing and the Costco membership is active on 31 December. It is not a monthly statement credit. Authorized users are not issued the certificate.
Can I use the certificate at the gas bar?
CIBC's benefits language says the certificate may not be used for gas, the food court, tobacco, and a list of other exclusions, and not at Costco.ca. Read the current benefits guide. A reward you can only spend inside the warehouse, on eligible merchandise, is still useful. It is not the same as cash in your chequing account.
Do I need a World Mastercard?
Only if you want that card's insurance and you meet $50,000 personal or $80,000 household income. The annual fee is $0 on both the Costco Mastercard and the Costco World Mastercard. Merchants can be charged more to accept a World card. That does not change your earn rate, but it is why some small merchants set a premium-card limit. Confirm whether the World earn table matches the regular card before you upgrade for a rate that may be identical.
What if I am not a Costco member?
You cannot hold the CIBC Costco card. The product page says it is exclusively for members. Any other Mastercard you already have will still pay at the warehouse at that card's base or category rate. Membership is a separate fee from the card. Do not buy a membership only to open the card.
