Top 5 Mastercard Cards to use at Costco

 

In 2015 Costco Canada switched from only accepting American Express Cards to only accepting Mastercard cards. Even though Capital One took the co-branded card away from American Express to offer a Costco Mastercard, and then CIBC took it away from Capital One in 2022, it does not mean you have to use the CIBC card to shop at Costco. In fact, any Mastercard card is accepted at Costco locations across Canada and with so many Mastercards to choose from here in the Great White North we thought it would be best to pass along our picks for the five best cards to use at Costco.

April 10 update: We have removed the Brim World Elite Mastercard from the list as it no longer offers 2% cash back at Costco (only 1% now for new cardholders and as of May 18, 2024 for existing cardholders) and we have updated the Rogers Red World Elite Mastercard to reflect the higher earn rates and redemption for Rogers customers

For Rogers/Fido/Shaw customers the number one cards are:

1. Rogers Mastercard / Rogers Red World Elite Mastercard - up to a 3% return on Costco purchases

The recently updated no annual fee Rogers Mastercard and Rogers Red World Elite Mastercard are now the highest earning Mastercard for Costco purchases if you are a Rogers, Fido or Shaw customer. If you are a customer of theirs and you get this card you will earn 2% cash back on all purchases made on the card including Costco. Then if you choose to redeem your cash back towards your Rogers/Fido/Shaw bill (or single purchase) they will give you an extra 50% cash back credit which means you return on spending works out to an unprecedented 3%!

If you are not a Rogers/Fido/Shaw customer, the top 5 cards are as follows:

1. BMO AIR MILES World Elite Mastercard - 1.67% to 1.75% return on Costco purchases

Thanks to receving a boost to earn rates at wholesale clubs, the BMO AIR MILES World Elite Mastercard has moved into top spot for purchases at Costco if you are not a Rogers customer. The new accelerated earn rate is 2 AIR MILES for every $12 spent at Costco. This works out to a 1.75% return when redeemed as Cash Miles which are worth 10.5 cents each or about a 1.67% return when redeemed for travel, based on the cash+miles rate of approximately 10 cents per mile. ($120 annual fee)

2. Rogers Red World Elite Mastercard - 1.5% return on Costco purchases

The Rogers World Elite Mastercard is a cash back card that provides a 1.5% return on Costco purchases. You can redeem for cash back against a purchase once your rewards balance hits $10. The card doesn't have a sign up bonus but does provide a decent insurance package, airport lounge access membership and best of all - it has no annual fee.

3. WestJet RBC World Elite Mastercard - 1.5% return on Costco purchases

This card has a base earn rate of 1.5% back in WestJet dollars which is equal to the RBC Cash Back Preferred World Elite Mastercard. The reason why we rank it third is that it has a more valuable welcome bonus and some additional valuable benefits like first checked bag free and an annual companion voucher. Plus the 1.5% is not capped. ($119 annual fee)

4. RBC Cash Back Preferred World Elite MasterCard - 1.5% return on Costco purchases*

A card that barely seems to get noticed in our market is RBC's Cash Back Preferred World Elite Mastercard. This card earns 1.5% cash back on Costco purchases however we have an asterisk beside the earn rate. The reason why is the 1.5% cash back on this card is limited to $25,000 in annual spend and then drops to 1% after that. ($99 annual fee)

5. Desjardins Odyssey World Elite Mastercard - 1.5% return on Costco purchases

The Desjardins Odyssey World Elite Mastercard awards 1.5% BONUSDOLLARS per $1 spent as Costco. One BONUSDOLLAR equals $1 so that works out to a 1.5% return on your Costco purchases. There is no cap to the 1.5% spending on the card so you will always earn that rate regardless of your spending habits. ($130 annual fee)

 

Honorable Mentions:

CWB World Elite Mastercard - 2% return on Costco purchases*

The CWB World Elite Mastercard receives an honorable mention as it has one of the highest returns for purchases at 2% but it is not available to residents of Quebec hence us not listing in the Top 5. Plus, there is a reason we have that asterisk above as the 2% return is limited to $25,000 in annual spending - not just at Costco. So if you spend more than this your rate of return drops to 1% on any spending over and above $25K so it will dilute your return over time. ($120 annual fee)

Air France KLM Flying Blue World Elite Mastercard - variable return on Costco purchases

This card fits more of a niche in the Canadian loyalty rewards landscape as its rewards are specific to the Air France KLM Flying Blue program. Points and miles aficionados know this loyalty program well as it can provide some huge outsized value when utilized right for economy or business class flights. Even though it only earns 1 Flying Blue Mile per dollar spent at Costco, it is that outsized value that can blow any of the above cards out of the water (think a 3%, 5%, or even 10% return) but like we said it's kind of a niche card that some Canadians just won't find the right value out of. ($132 annual fee)

Cathay World Elite® Mastercard® – powered by Neo - variable return on Costco purchases

Another niche card as its rewards are specific to the Cathay Pacific Cathay (nee Asia Miles) program. This program also has the potential to provide outsized value when utilized right for economy or business class flights. The card earns 1 Asia Miles per dollar spend at Costco which then redeemed for flights should give returns of 1.5% for economy class and 3% or more for business class. ($180 annual fee)

All of the World Elite Mastercards listed above come with the latest World Elite benefits

What about the CIBC Costco Mastercard

The CIBC Costco Mastercard hit the market on March 4, 2022 and replaced the Capital One version of the card. Existing Capital One Costco cardholders were transferred over to this card. Here are the quick details on the CIBC Costco card:

The new CIBC Costco Mastercard will continue to be a no annual fee cash back rewards card and will earn cash back as follows:

• 2% cash back earned on Costco.ca on purchases up to $8,000 (1% thereafter)
• Earn 3% at Costco Gas and 2% at non-Costco gas stations on the first $5,000 spent on gas (1% thereafter)
• 1% cash back on every purchase everywhere Mastercard is accepted, including at Costco warehouses.
• 3% cash back at restaurants 

As you can see it will earn 1 % for shopping at physical Costco stores warehouses which much like the Capital One card it replaces has a lower return than the cards we present as the top 5 options. There is one hack around this and that is buying Costco Gift Cards online at Costco.ca so that you can earn 2% and then use those gift cards in store.

You also have the option of shopping with Costco online which opens it up to using a Visa card as Costco.ca takes both Mastercard and Visa. Or you can use a high earning American Express card like the Cobalt™ Card  to earn big time points (5% back) when you buy prepaid Mastercards at a grocery store and then use that prepaid card at Costco.

Even if you have a Mastercard card that is not on this list but it earns rewards you are ahead of the game, it doesn't mean that your card is bad. It could very well be the right card for you or perhaps it is just OK and one of these will work better for you, especially if you spend a lot at Costco stores. You should also take into account all your other purchasing and loyalty program miles/points accumulation before applying for a new card or jumping ship from the card you currently have.

There are two other cards that are decent to use at Costco - the Capital One Aspire Travel World Elite Mastercard and the Diners Club Club Rewards Mastercard, both of which provide a 1.5% return. The only issue with these two cards is that they aren't available for new applications. Only those people who currently have them can use them at Costco.

What do you think of this list? Are any of these cards in your wallet? If not are you apt to choose one of them or will you go with another Mastercard card?

This article was first posted on January 13, 2015 and is continually updated

Title image via Costco Canada