CIBC Costco Mastercard review: Is it the best credit card for Costco in Canada? - MoneySense (2024)

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By Justin Dallaire on July 26, 2024
Estimated reading time: 11 minutes

By Justin Dallaire on July 26, 2024
Estimated reading time: 11 minutes

Customers can use any Mastercard at Costco check-outs. We break down if Costco’s store-branded card is really the best option for frequent shoppers.

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CIBC Costco Mastercard review: Is it the best credit card for Costco in Canada? - MoneySense (1)

Photo by Open Grid Scheduler / Grid Engine on Flickr

Costco is a popular shopping destination for Canadians who want deep discounts on bulk buys. The catch? Costco requires you to have a membership to shop there, and that costs either $60 per year (for a Gold Membership) or $120 per year (for an Executive Membership). Costco’s also pickier than most retailers when it comes to credit cards. For example, you can only use Mastercards when cashing out in person or fuelling up on gas at Costco stations.

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If you frequently shop at Costco, you’ve likely noticed ads for the CIBC Costco Mastercard. This no-fee credit card doubles as your membership card and offers rewards on your Costco purchases. But is it the best credit card for frequent Costco shoppers? Read on to learn more about the CIBC Costco Mastercard, and find out how you might earn even more rewards with a few alternative credit cards.

CIBC Costco Mastercard review

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CIBC Costco Mastercard

CIBC Costco Mastercard review: Is it the best credit card for Costco in Canada? - MoneySense (2)

VISIT CIBC.CA FOR MORE DETAILS

Annual fee: $0

  • 3% at restaurants and at Costco gas stations
  • 2% back at other gas stations and at Costco.ca
  • 1% on all other purchases (including Costco)

Welcome offer: This card does not have a welcome bonus at this time.

CIBC Costco Mastercard review: Is it the best credit card for Costco in Canada? - MoneySense (3)

VISIT CIBC.CA FOR MORE DETAILS

Card details

Interest rates20.75% on purchases and 22.49% on cash advances
Income required$15,000 per year
Credit score560 or higher

The pros

The CIBC Costco Mastercard is a no-fee cash back card (just like its predecessor, the Capital One Costco Mastercard). It offers 3% cash back at restaurants and Costco gas stations, 2% cash back at other gas stations—which is handy when you’re on the go—and 2% back when you shop at Costco.ca. For other purchase categories, you’ll earn 1% cash back (including in store at Costco).

This card also comes with mobile device insurance, with up to $1,000 of repair or replacement coverage when you charge or finance the mobile device on your card. With certain eligible purchases, you can also get security insurance and extended warranty insurance. If you meet certain requirements, like having a person income of over $50,000 per year, you may qualify for the CIBC Costco World Mastercard. It’s essentially the same card, but includes World Mastercard benefits like car rental insurance, travel perks and more.

The cons

While the CIBC Costco Mastercard has no annual fee, to truly reap the card’s benefits, you need have to have a Costco membership, which costs either $60 or $120 per year. Another point: there’s no limit on how much you can earn throughout the year. But, the cash back earn rate does come with a cap. When you reach your annual spend in a category, you’ll still earn cash back—it will just be at the 1% rate for the remainder of the calendar year. For gas, you will receive the 3% cash back rate (and 2% cash back rate at other gas stations) only on the first $5,000 charged. After that, you’ll earn the 1% cash back rate. For Costco.ca purchases, the cap is $8,000. After that, you return to the 1% base rate.

And while some cards pay out cash back earnings monthly, straight onto your statement or into your savings account, the CIBC Costco Mastercard gives them to you in the form of gift certificates, issued in January, that you can redeem at Costco.

Frequently asked questions

You can only use Mastercard credit cards when shopping in Costco stores in Canada. (In the U.S., the opposite is true: You can only use Visa credit cards.) However, Visa credit cards are accepted online at Costco.ca. The wholesale retailer accepts other forms of payment as well. See below for a breakdown by point of sale.

Yes. A foreign transaction fee of 2.5% applies to any purchase in a foreign currency. The fee is charged by CIBC, not Costco. To save on this cost, you could have a no foreign transaction fee credit card in addition to your Costco credit card.

No. The CIBC Costco Mastercard only includes extended warranty, purchase protection and mobile device insurance. These three types of insurance are fairly standard for no-fee credit cards. If you want travel insurance, consider a travel credit card.

Yes, but not as a bonus category. With Mastercard, you typically earn at the card’s base rate (the rate given for “all other purchases”). This is due to the way Mastercard categorizes spending at Costco (grocery purchases at the store are considered ”wholesale club” purchases). Similarly, when using a Visa credit card on Costco.ca, you will only get at the base earn rate on your card.

No. The CIBC Costco Mastercard doesn’t have an annual fee. To be eligible, you must be a Costco member, which costs $60 or $120 per year, depending on the type of membership you choose. That said, the CIBC Costco Mastercard does double as your membership card, so you don’t have to worry about carrying both in your wallet.

On March 4, 2022, Costco officially made the switch from the Capital One Costco Mastercard to the CIBC Costco Mastercard. The Capital One card is no longer issued nor accepted.

Upcoming changes to Costco membership fees

Costco membership fees in Canada will increase on Sept. 1. The cost of Costco Gold Star memberships will rise $5 per year (from $60 to $65 annually) and Costco Executive Membership will increase $10 per year (from $120 to $130 annually).

Costco credit cards in Canada: 3 things to know

Knowing these three things can help you pick a good credit card and maximize your rewards at Costco.

1. With Mastercard, Costco purchases are considered “wholesale club” purchases

And why shouldn’t they be? You may think this is an obvious point that has no real impact on your spending strategy at Costco. And yet it’s probably the most important factor to keep in mind when selecting a Costco credit card. Each credit card network uses merchant codes to determine how purchases are categorized—and, crucially, whether they fall within a rewards bonus category.

With Mastercard, your Costco purchases are “coded” as “wholesale club.” This means your Mastercard with a high earn rate on groceries, for example, might not be rewarding you that well at Costco. Although the BMO CashBack Mastercard offers 3% cash back on groceries, for example, you earn only 0.5% on grocery purchases at Costco, which is 0.5% less than with the CIBC Costco Mastercard.

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With this in mind, there are two ways to maximize your rewards when shopping in Costco stores. You can either find a Mastercard with a high earn rate on all purchases (including those at a wholesale club), or find a card that has wholesale club spending as a bonus category. Rogers Red World Elite Mastercard is a good example of the former. There are notably few examples of the latter, but the BMO Air Miles World Elite Mastercard recently became one.

2. Costco.ca accepts Visa—but not American Express

Do you carry a Visa? Good news: You can already shop online at Costco.ca. (See below for a breakdown of accepted payment methods by point of sale.) And if you’d rather not apply for a new credit card just so you can check out in Costco warehouses, there’s a way around the company’s Mastercard-only rules for in-person shopping—it just requires a few extra steps.

Go to Costco.ca and purchase a Costco Shop Card using your preferred Visa credit card. You can buy Costco Shop Cards in denominations of $50 to $2,000, and the cards can be used in stores and online. While only Costco members can purchase Costco Shop Cards, they can be redeemed by non-members in Costco locations, so long as the person gets a one-day shopping pass for non-members at the membership counter. So, in practice, you can buy a $1,000 Costco Shop Card online for yourself (or a friend or family member who isn’t a Costco member) using your Scotia Momentum Visa Infinite, for example. The transaction would earn you $10 in cash back rewards.

This explains why we’ve included a few of the best Visa credit cards in Canada as viable alternatives to the CIBC Costco Mastercard. Note: Costco doesn’t accept American Express cards, period—so you’ll need a Visa for this to work.

3. Costco has its own rewards program

Costco currently has two membership tiers: a base-level Costco Gold Membership ($60 per year) and a higher-tier Costco Executive Membership ($120 per year), but those prices will go up as of Sept. 1 (as noted above). There’s also a Costco Business Membership ($60), which allows you to buy items for business, personal and resale use. Executive members earn a 2% reward on purchases made by the primary and additional cardholders, on the first $50,000 spent annually (for a maximum annual reward of $1,000). Some exclusions apply. Given that they will receive 2% back on many Costco purchases, upgrading to an executive level may be worth it if you spend more than $3,000 per year at Costco—you’d earn $60 in rewards, enough to offset the costs of the upgrade. Note: Executive membership rewards are only issued as gift certificates that can be redeemed in physical warehouses—they’re not true cash.

Payment methods accepted at Costco in Canada

Payment methodPoint of sale
Mastercard ✅ Costco warehouses
✅ Costco.ca
✅ Costco gas stations
Visa ❌ Costco warehouses
✅ Costco.ca
❌ Costco gas stations
American Express❌ Costco warehouses
❌ Costco.ca
❌ Costco gas stations
Debit card✅ Costco warehouses
✅ Costco.ca (most PIN-based debit cards)
✅ Costco gas stations
Costco Shop Card✅ Costco warehouses
✅ Costco.ca
✅ Costco gas stations (physical cards only)
Cash ✅ Costco warehouses
❌ Costco.ca
❌ Costco gas stations
Apple Pay✅ Costco warehouses
✅ Costco.ca
❌ Costco gas stations

The best CIBC Costco Mastercard alternatives in Canada

Our top pickYour spending personality
Rogers World Elite Mastercard
Annual fee: $0
You want cash back
BMO Air Miles World Elite Mastercard
Annual fee: $120
You collect Air Miles
Scotia Momentum Visa InfiniteAnnual fee: $120You want cash back from a Visa credit card
TD Aeroplan Visa Infinite CardAnnual fee: $139You want travel points from a Visa credit card

If you want cash back

At a glance: On in-store Costco purchases, the Rogers Red World Elite delivers 1.5% cash back on every dollar spent—a full 0.5% more than the CIBC Costco Mastercard. Even better, if you’re a Rogers, Fido or Shaw customer, you’ll earn at a boosted rate of 2% on all purchases. The card’s flat-rate rewards structure means you won’t have to worry about missing out on bonus categories.

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Rogers Red World Elite Mastercard

Annual fee: $0

  • 3% cash back on all purchases in USD
  • 2% back for Rogers, Fido and Shaw customers
  • 1.5% cash back on all other purchases

Welcome offer: This card does not have a welcome bonus at this time.

Card details

Interest rates20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers
Income required$80,000 per year
Credit score725 or higher

Pros

  • No card offers a higher cash back rate on every dollar spent in Costco warehouses.
  • Earn 3% cash back on all purchases in U.S. dollars—enough to cover the 2.5% foreign transaction fee.
  • Redeem your rewards against purchases on your card as soon as you have $10 banked.


Cons

  • You need a personal income of $80,000 or a household income of $150,000 per year in order to qualify.

If you collect Air Miles

At a glance: For Costco shoppers, the BMO Air Miles World Elite Mastercard just got an upgrade. Thanks to changes introduced by BMO in July 2024, the card now offers 2 Miles per $25 spent at wholesale stores, including Costco and Walmart. Given the approximate value of 1 Air Mile ($0.121), that gives you just under 1% back in travel rewards on purchases at these stores. No other Mastercard offers a bonus rate on Costco purchases—not even the CIBC Costco Mastercard.

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BMO Air Miles World Elite Mastercard

Annual fee: $120

  • 3 Miles per $12 spent at Air Miles partners
  • 2 Miles per $25 spent at eligible grocery, liquor and wholesale stores
  • 1 Mile per $12 spent everywhere else

Welcome offer: earn 3,000 AIR MILESBonus Miles! That's enough for$310towards purchases with AIR MILES Cash!

Card details

Interest rates20.99% on purchases, 23.99% on cash advances, 23.99% on balance transfers
Income requiredPersonal income of $80,000 or household income of $150,000
Credit score760 or higher
Point value1 Dream Mile = $0.0121 on average when redeemed for travel. 1 Cash Mile = $0.105.

Pros

  • The only Mastercard that comes with a bonus rate on wholesale and liquor store purchases.
  • The only Air Miles credit card to offer a 25% discount on one worldwide flight redemption during the calendar year.
  • Robust travel insurance, including $5 million in out-of-province/out-of-country emergency medical for cardholders under 65 years of age.
  • Complimentary membership in Mastercard Travel Pass provided by DragonPass, giving you access to airport lounges.

Cons

  • You need a personal income of $80,000 or a household income of $150,000 per year in order to qualify.

If you want cash back from a Visa credit card

At a glance: If you don’t want a Mastercard just to shop at Costco, you still have options. The wholesale retailer accepts Visa credit cards online at Costco.ca. With the Scotiabank Momentum Visa Infinite, you’ll get 1% cash back for your online purchases. Although it offers a much better 4% cash back on grocery purchases made at other stores, the 1% is still better than many other cash back credit cards. The CIBC Dividend World Elite and BMO CashBack Mastercard World Elite come with the same 1% earn rate on online purchases.

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Scotiabank Momentum Visa Infinite

Annual fee: $120

  • 4% cash back on groceries, recurring bill payments and subscription services
  • 2% on gas and public transit
  • 1% on everything else

Welcome offer: earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). No annual fee in the first year, including on additional cards. Offer ends October 31, 2024.

Card details

Interest rates20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers
Income requiredPersonal income of $60,000 or household income of $100,000
Credit score725 or higher

  • 1% is the highest cash back rate you can get for online purchases at Costo.ca.
  • Pay off larger purchases in installments through Scotia SelectPay.Text


Cons

  • As a Visa card, this can only be used for online purchases at Costco.ca. If you frequently shop in Costco stores, consider other options.
  • You can only access your cash back once per year, and only as a statement credit.

You want travel points from a Visa credit card

At a glance: Aeroplan is one of the most best travel loyalty programs in the country. And the TD Aeroplan Visa Infinite will net you 1 Aeroplan point per dollar spent online at Costco.ca. Considering each point is worth an average of $0.02 when redeemed for travel, this card provides a roughly 2% return on your spending—more if you’re buying gas and groceries from somewhere other than Costco.

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TD Aeroplan Visa Infinite Card

Annual fee: $139

  • 1.5 Aeroplan points per $1 on gas, groceries and purchases
  • 1.5 Aeroplan points per $1 on purchases made directly through Air Canada (including vacation packages)
  • 1 point per $1 on all other purchases

Welcome offer: earn a welcome bonus of 10,000 Aeroplan points when you make your first purchase with your new card; earn 15,000 Aeroplan points when you spend $7,500 within 180 days of account opening. Conditions apply. Account must be approved by September 3, 2024.

Card details

Interest rates20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers
Income requiredPersonal income of $60,000 or household income of $100,000
Credit score660 or higher
Anniversary bonusEarn a one-time anniversary bonus of 15,000 Aeroplan points when you spend $12,000 within 12 months of opening the account. Conditions apply. Account must be approved by September 3, 2024.
Point valueAeroplan points are worth $0.02 on average.

Pros

  • Although Aeroplan is an Air Canada loyalty rewards program, you can redeem points on a dozen Star Alliance partner airlines like United and Lufthansa, giving you more flexibility to redeem your points.
  • It comes with a rebate for a Nexus fee (for smoother travel south of the border), savings on baggage fees for your first checked bag on Air Canada flights, and the ability to earn “Status Qualifying Miles” and “Status Qualifying Segments,” which will help you reach Aeroplan Elite Status faster.


Cons

  • As a Visa card, you won’t be able to use this credit card in Costco stores.
  • Aeroplan is a dynamic rewards program with fluctuating point values, so this card’s not ideal for those who want a very straightforward rewards structure.
  • The annual fee is higher than some other cards in its category.

More of Canada’s bestcredit cards:

  • The best instant approval credit cards
  • The best credit cards for gas
  • The best credit cards for grocery purchases
  • The best cash back credit cards

CIBC Costco Mastercard review: Is it the best credit card for Costco in Canada? - MoneySense (12)

About Justin Dallaire

Justin Dallaire is the senior editor at MoneySense.ca. He was previously an editor at Strategy magazine and has a master’s degree in journalism from Toronto Metropolitan University.

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