Have a Costco membership? Filling up your car there could save you big time.
It's no secret that gas prices have soared over the past number of weeks, due in part to general inflation and also the ongoing Ukraine-Russia conflict. As such, many Americans are having a difficult time keeping up with their expenses.
In fact, based on how much Americans drove in 2021, at today's gas prices, vehicle owners could see the cost of fueling their cars rise to around $181 a month and $2,168 a year. That's more than a month of housing costs for the average person.
All told, gas accounts for 2.6% to over 5% of Americans' budgets. And so when gas costs rise, it's important to eke out as much savings as possible.
That's where Costco comes in. Costco is known as a source of low-cost household goods and groceries. But many Costco locations also have gas stations. And that gives you an opportunity to save.
Lower-cost gas fill-ups
The amount of money you'll save by filling up your car at Costco will depend on your location and what local prices look like. But for the most part, you can expect to spend less per gallon on gas at Costco than at your typical pump. If you do a weekly shopping run at Costco, it pays to coordinate it with when your tank is running closer to empty so you can maximize your savings.
Eking out the most rewards
Some gas stations offer a discount to customers who pay cash instead of using a credit card. Costco doesn't do this. Rather, it advertises the same price regardless of how you pay. (It does, however, offer different prices for regular gas versus premium, which is to be expected.)
As such, it pays to use the right credit card when filling up your car at Costco. Doing so could result in big savings.
This Costco credit card gives you 4% cash back on gas
One option worth looking at is the Costco Anywhere Visa® Card by Citi. If you shop at Costco a lot, the card is worth getting, because it gives you 2% cash back on Costco purchases. It also gives you 4% cash back on gas, whether you fill up at a Costco station or another station.
To be fair, that 4% cash back rate is limited to your first $7,000 in gas spending per year. From there, you only get 1% cash back on fill-ups. But let's be real -- even at today's prices, most people aren't spending $7,000 a year to fuel their vehicles.
That said, there may be a different credit card out there that offers a better rewards program, including a more generous cash back setup for gas. It's worth exploring different options and seeing what you find, especially if you drive a lot.
In fact, if your primary goal is to get rewarded at the pump, you can check out this list of the best gas credit cards. Many of the cards on the list offer benefits aside from bonus cash at the pump, so make sure to do your research -- especially if your current credit cards leave much to be desired.
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FAQs
9 Ways To Maximize Your Costco Membership
- Shop With a Plan. ...
- Stock Up on Sale Items. ...
- The Best In-Store Deals Tend To Not Be in the Front. ...
- Take Advantage of Travel Deals. ...
- Get Your Prescriptions Filled There. ...
- Fuel Up. ...
- Use the Right Credit Card. ...
- Go for the Gift Cards.
In the U.S., Rewards are not calculated: (i) on purchases of cigarettes or tobacco-related products, gasoline, Costco Cash Cards, postage stamps, alcoholic beverages in certain states (including Alabama, Connecticut, Georgia, Kentucky, Michigan, Ohio and Tennessee), and at food courts; (ii) on membership fees; (iii) on ...
Does Costco give 4 back on gas? ›
Earn cash back rewards on purchases wherever Visa® is accepted. You'll get 4% back on eligible gasoline purchases for the first $7,000 per year and then 1% thereafter.
Does Costco gas really save money? ›
Generally speaking, buying gas at Costco is significantly cheaper than doing so at a traditional gas station. The typical driver can save more than $100 per year. Buying gas at Costco can justify a membership all by itself.
What is the winning strategy of Costco? ›
Low prices, high quality
Costco's strategy of stocking high-quality items, which are sold in bulk-size at low-profit margins entices their target customers to become Costco members and to buy more products during their shopping trip.
Does Costco Executive get 2% back on gas? ›
Gas purchases, for example, do not earn you cash back as an Executive member. Neither do cigarette purchases or alcoholic beverage purchases in certain states. Additionally, Costco Shop Cards (Costco's version of a gift card) won't be eligible for cash back, and neither will postage stamps.
How much do you need to spend at Costco to break even? ›
So, if you spend at least $250 a month shopping in-person at Costco, you probably break even on your Executive upgrade. (And if you spend at least $500 a month at Costco, you're breaking even on your entire membership cost.)
What gas is eligible for Costco rewards? ›
Eligible gas stations include any facilities that assign a merchant category code (MCC) for gas and EV charging stations to its fuel purchases. Costco Credit Card cardholders will get 4% cash back on all eligible purchases up to $7,000 spent each year, and 1% cash back afterwards.
How much to break even Costco executive? ›
You'd need to spend an average of $250 a month -- or $3,000 a year -- at Costco for you to break even on your Executive upgrade. If you can't meet that bottom limit, you're losing money. Unless you're going to increase your spending, you should downgrade your membership.
What is the MCC code for Costco gas? ›
Similarly, many Costco fuel locations are listed as MCC 5542 — automated fuel dispensers — instead of MCC 5541 (like most traditional gas stations). Depending on your card, bonus category descriptions can void rewards on these purchases.
An executive membership at Costco costs $120 per year, which is twice as much as a basic membership. The primary benefit of the executive membership is scoring 2% back on Costco purchases. Certain purchases don't qualify for cash back, including gas, stamps, and vehicles.
Can I cash my Costco rewards check? ›
Credit card reward certificates may be redeemed for merchandise or cash back at any U.S. Costco warehouse, including Puerto Rico. Requests to redeem the certificate for cash may be fulfilled in an alternative form (e.g., a check or electronic transfer) at the Costco warehouse's discretion.
Why is gas so much cheaper at Costco? ›
So why is it so much cheaper than the competition? The short answer is that unlike pretty much every other retail business that sells gasoline, Costco doesn't care about making money from its gas pumps. In fact, Costco typically sells its gas at a moderate loss.
What's better, Costco or Sam's? ›
Costco has more stores across the globe, is expanding rapidly, and generally offers cheaper prices than Sam's Club does, although the latter charges slightly less for membership, has a bigger presence in the U.S., and stocks more name brands.
How much do I have to spend to make Costco Executive membership worth it? ›
How much you'd need to spend to make Costco Executive Membership worthwhile. In order to receive $60 in reward dollars and recoup the $60 more that an Executive Membership costs, one must spend $3,000 over the course of the year at Costco on eligible purchases, an average of $250 a month.
How to make money off of Costco membership? ›
Make Sure You Have the Right Membership
The Executive Membership comes with a 2% annual award up to $1,000 on eligible Costco and Costco Travel purchases. Therefore, if you spend $3,000 per year at Costco — i.e., $250 per month — you'll get a $60 reward, meaning the elevated membership paid for itself.
How to make Costco Executive membership worth it? ›
The main information you'll need to determine if the Executive membership is worth it is how much money you spend at Costco each year. Calculating if the $120 Executive Membership is worth the upcharge is simple. Because you get 2%, you'll need to spend $3,000 to receive $60 in cash back.
How often do you get raises at Costco? ›
How Often Does Costco Give Raises? Salary raises at Costco occur every six months and amount to $1, depending on your working hours. Your performance, customer service, leadership potential, and seniority also contribute to the increase.
