By Gao Yun
As the cost of everyday living continues to rise, Costco has quietly introduced a new perk for its members. According to a Jan. 18 report by the Daily Mail, the retail giant has increased the cashback rate on fuel purchases made at Costco gas stations for holders of its co-branded credit card.
The report states that Costco has raised the cashback rate on gas purchased at its own stations to five percent. The increase applies to purchases made using the Costco Anywhere Visa Card, a co-branded credit card issued by Citibank (Citi). Previously, fuel purchases at Costco earned four percent cashback.
The higher five percent rate, however, applies exclusively to fuel purchased at Costco gas stations. Gas purchases made at non-Costco stations continue to earn four percent cashback. Eligible electric-vehicle charging expenses outside Costco also remain at the four percent rate.
In terms of limits, the cashback earned from both the five percent Costco gas purchases and the four percent fuel purchases elsewhere is subject to a shared annual cap of $7,000. Once cardholders reach that threshold, all remaining fuel purchases for the rest of the year earn just one percent cashback.
For the best of our weekly content！
You are now signed up for our newsletter
Check your email to complete sign up
Industry analysts say the move is aimed at reinforcing loyalty among Costco’s more than 80 million paying members worldwide.
Neil Saunders, a retail analyst at GlobalData, explained that increasing fuel rewards is a strategic effort to encourage more consumers to apply for Costco’s co-branded credit card, which in turn helps boost the company’s profitability. He noted that consumers who hold retailer-issued credit cards tend to be more loyal to the issuing brand.
Other aspects of the card’s rewards structure remain unchanged. Cardholders earn:
The credit card carries no annual fee, though cardholders are required to maintain an active Costco membership.
The method for distributing cashback also remains the same. Rewards are issued once a year in the form of a certificate, typically after the February billing cycle.
Fuel costs are among the largest household expenses, second only to housing. Costco has repeatedly emphasized that maintaining a high renewal rate among its more than 80 million paid members is a top corporate priority.
Membership fees currently stand at $65 per year for a standard membership. The Executive membership, priced at $130 per year, offers additional benefits, such as early store access and higher annual rewards.
Higher upfront costs but future savings
While the higher upfront cost may give some consumers pause, a recent report suggests that frequent shoppers can often recover the cost of membership quickly through lower prices on everyday necessities.
Savings from bulk purchases of commonly used items—such as diapers, coffee, cheese, and water-filtration cartridges—can offset the membership fee within just a few months. A single major purchase, such as a television, sofa, or even an engagement ring, may be enough to “break even” in one transaction.
Some Reddit users have pointed out that over-the-counter medications like ibuprofen and antihistamines, along with paper goods and Costco’s widely popular rotisserie chicken, are sufficient to justify the membership fee. One user remarked that purchasing smoked salmon alone was enough to make the membership worthwhile.
Beyond cashback incentives, the report also notes that Costco disclosed in December that it is adjusting its checkout process. The company has begun rolling out new technology that allows employees to scan items while customers wait in line, so that shopping carts are already tallied before reaching the register.
Costco CEO Ron Vachris said the system is intended to shorten wait times while ensuring that checkout areas remain adequately staffed.
