Wednesday, June 20, 2012

TrueEarnings Costco credit card from American Express

During my research recently about cashback credit cards, one of the cards that perked my interest was the TrueEarnings Costco credit card from American Express.

Is this card worth it?

The card boasts of an impressive cashback percentage. They term it the 3-2-2-1 formula :)
That is -

3% cashback on gasoline (Note this is subject to an annual limit of 3000 $. Beyond that they will give 1% cashback )
This is a definite plus if you drive a lot! At today's prices, this is 3 % on nearly 850 to 1000 gallons a year.
Plus remember Gasoline at Costco is generally cheaper than other gas stations. So that's a double benefit!

2% cashback on restaurants. 
If you are like me and eat out quite regularly, then this is definitely another big plus

2% cashback on travel
Who doesn't like to travel? :) If your plane tickets, car rentals and hotel bills give you 2% cashback, then it is again pretty good. 

1% cashback on all other purchases including Costco
Now let me compare this with the other American Express card I liked a lot - Blue Cash Everyday American Express card. That card offers 3% cashback on all grocery purchases but has a catch that the groceries have to be bought in supermarkets.
Costco will be considered a wholesale club. Walmart will be considered a superstore. So purchases in these places will only fetch you 1% cashback with the Blue Cash Everyday card.
This Costco TrueEarnings card is also offering the same 1% cashback on Costco purchases. So in my personal opinion, this is not really a parameter that differentiates these cards.

Lets talk about Annual fees. The Costco credit card doesn't charge you annual fee as long as you maintain your Costco membership.
So the annual membership fee is the same as the costco membership fee if you don't already have a Costco membership. But if you do, then this card is free!

How do you redeem your rewards? you get a reward coupon from American express that you need to redeem at Costco. You can do so as both merchandise or cash.
I personally don't like the fact that the cashback rewards can be utilized only annually once. Plus you need to take your coupon to the local Costco to redeem it. I would prefer the multiple options which Chase offers! You can get it as a check or credit back to your account as well from Chase. That's pretty convenient!

Overall I felt this card is very useful if you are a larger family and have the habit of buying in bulk from a wholesale club to save on expenditure. Costco is definitely one of the better or best wholesale clubs around. So if you fall in this category, this card is really good. 

If you don't fall in this category like me, then the American Express Blue cash Everyday or Preferred is a better card for you.

Hope this review helps you!

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