Warehouse retail giant Costco has significantly sweetened the deal for customers using its branded credit card, announcing a boost in cashback rewards on fuel purchased at its own petrol stations.
Enhanced Rewards at the Pump
The company has lifted the cashback rate from 4% to 5% for fuel bought at Costco locations using the Costco Anywhere Visa Card, which is issued by Citi. This enhanced reward is specifically targeted at purchases made at Costco's own pumps and does not apply to fuel bought elsewhere.
For purchases at non-Costco fuel stations, as well as eligible electric vehicle charging, the cashback rate remains at the previous level of 4%. All these fuel-related rewards, whether at 5% or 4%, contribute towards a shared annual cap of $7,000. Once cardholders reach that spending limit, any additional fuel purchases for the rest of the year will earn a reduced 1% cashback.
A Strategy for Member Loyalty and Profit
Industry experts view this move as a clear play to reinforce customer loyalty among Costco's vast base of more than 80 million paid members, especially as household budgets remain tight. Retail analyst Neil Saunders from GlobalData explained the dual benefit.
'The boosted gas rewards is a bid to get more people to take its credit card — which helps the company’s profits,' Saunders said. 'Those with branded credit cards tend to be a little more loyal to the chains they get them from.'
This strategy aligns with comments from Costco's CEO, Ron Vachris, who has stated that protecting member value is the company's top priority during ongoing financial pressures on families.
Other Card Perks and Membership Value
The other cashback rewards on the Costco Anywhere Visa Card remain unchanged. Cardholders continue to earn:
- 3% cash back on restaurants and eligible travel, including bookings via Costco Travel.
- 2% cash back on purchases made at Costco warehouses and on Costco.com.
- 1% cash back on all other spending.
The credit card itself carries no annual fee, but users must maintain an active Costco membership, which starts at $65 per year for the basic tier. The higher $130 Executive membership offers additional perks like early store entry. The annual cashback rewards are issued once a year as a certificate, typically after the February billing cycle.
With fuel being one of the largest household expenses after housing, this increased reward is a tangible benefit. Costco has repeatedly emphasised its focus on protecting membership renewal rates. A recent report highlighted how regular shoppers can quickly recoup the membership fee through bulk savings on everyday essentials like nappies, coffee, and cheese, or with a single large purchase such as a television or sofa.
Broader Changes at Costco
This reward enhancement comes alongside other recent initiatives from the retailer. In December, Costco revealed it was revamping the checkout experience by rolling out technology that allows staff to scan items while customers wait in line, aiming to speed up service.
The company has also been tightening its policies around membership sharing. Last year, it installed card-scanners at store entrances and began requiring staff to check membership cards at its popular outdoor food courts across the US, a move that limits non-members' access to its famed $1.50 hot dog and soda combo.
