You’ve probably experienced being offered a Costco Cash Back Mastercard. But is it really worth it?
In order to answer this question, this article presents this card’s features and benefits as offered by Capital One. Since Costco and Capital One’s partnership comes to an end in September 2021, we’re also comparing it to other credit cards that offer cash back or rewards points.
If you want to compare more credit cards, we encourage you to take a look at our credit cards comparison tool.
Capital One Costco Mastercard
The Capital One Costco Mastercard is free of charge and available exclusively to Costco members. Note that it can also serve as your membership card, which is always helpful for those who tend to misplace their membership cards.
With this card, you accumulate cash back rewards (up to 3%) wherever Mastercard is accepted. You can apply for it at a Costco store or by following the link displayed on our credit card comparison tool.
Capital One Costco Mastercard rewards
You get 3% discount on restaurant expenses and 2% on fuel, regardless of the type of fuel. For all other types of purchases you earn 0.5%. The discount increases to 1% after $3000 of purchases during the same billing cycle and there is no limit on the amount accumulated. Discount accumulated in the previous year is paid to you in the form of a cheque in January of the following year. This can be used for all types of purchases at Costco.
Capital One Costco Mastercard benefits
This card gives you access to “Everyday Benefits”, “Travel Benefits” and “Mastercard Benefits”.
Everyday Benefits: The price protection service can save you money. For example, if you pay $60 for an item that goes down to $40 a few days later, this service provides you with a $20 refund for the difference. For this to apply, the price reduction must occur within 60 days from the date of purchase. The maximum price difference is $100 per item and you can recover a maximum of $500 per calendar year. You also get 120-day purchase protection on all items paid for with Capital One that are stolen, lost or damaged anywhere in the world. Items will be replaced, repaired or refunded. Lastly, there is also an extended warranty provided that doubles the manufacturer’s initial warranty, up to a maximum of 2 years on the item.
Travel Benefits: When you purchase your ticket using the Capital One Mastercard, you and your family will be insured against accidental death or dismemberment. This coverage can be up to $250,000 for all trips on a bus, cruise ship, airplane or train. You can also receive up to $100 per day for 3 days if your luggage is delayed for more than 4 hours, and you’re entitled to 24/7 travel assistance service. Capital One’s vehicle rental collision/damage insurance provides the same coverage as the collision damage waiver offered by rental companies. This is a potential savings of about $20 per day, for a maximum duration of one month. For this to apply, you obviously have to put the cost of the car rental on the card.
Mastercard benefits: These are benefits that are found on almost all Mastercards. If your card is lost or stolen, Mastercard Global Services provides you with emergency replacement, cash advances, phone service and an ATM referral. With Zero Liability, you are protected when your account is subject to an unauthorized transaction.
Now that you know more about the Capital One Costco Mastercard, let’s compare it with other great cards.
BMO CashBack World Elite Mastercard
If you’re looking for a credit card that can earn a lot of cash back at Costco, the BMO CashBack World Elite Mastercard is a great option. The annual fee is $120, but it’s waived in the first year, and each additional card costs $50 per year. In order to be eligible, the cardholder must have an annual income of $80,000 (or $150,000 per household).
The rewards: BMO CashBack World Elite Mastercard
This card provides 1.5% cash back on all purchases made at Costco or elsewhere, which is applied directly to your statement. This cash back is 10% for the first 3 months.
The benefits: BMO CashBack World Elite Mastercard
This card includes a free membership in the Mastercard Airport Experiences program provided by LoungeKey. This program enhances long delays at airports thanks to relaxation lounges and promotions in restaurants, shops and spas. Download the app to your iPhone or Android to find shows and special offers.
If you have a BMO Performance Plan chequing account, you get a $40 rebate per year on the BMO CashBack World Elite Mastercard. To learn more about BMO chequing accounts or those from other financial institutions in Canada, you can consult this chequing account comparison tool.
As a cardholder, you are also automatically a member of the Dominion Automobile Association (DAA) for roadside assistance at no cost.
You are also entitled to 15% off all Cirque du Soleil shows in Canada and 20% off shows in Las Vegas.
For perks, you get the “BMO CashBack World Elite Travel Insurance” protection package. It includes insurance on a vehicle rental while traveling, covering damage, theft, accidents, accidental dismemberment, and death. If an unforeseen event requires you to cut your trip short, like a death in the family, you have coverage of up to $2000 per person for all expenses incurred. You also have flight delay insurance, if your flight is delayed over 6 hours, and baggage loss or delay insurance of up to $750 per person. For those 65 and under, you have insurance for all hospital medical expenses for weekly stays outside the province or country.
This card also offers Purchase Protection Plus, which protects against theft and damage of a product purchased with the BMO CashBack World Elite Mastercard. Extended Warranty Plus extends the product and retailer’s warranty for up to 2 years. The maximum reimbursement is $60,000 for each of these insurances.
The differences: BMO CashBack World Elite Mastercard
The Capital One Mastercard does not require any minimum income in order to be eligible. BMO’s requires an income of $80,000 per person or $150,000 per household annually. The BMO Cash Back World Elite Mastercard also has an annual fee of $120, whereas the Costco card has no annual fee.
For cash back, the Capital One card offers a higher reward rate on fuel and dining. For all other types of purchases, it is lower than the BMO card, which gives back 1.5%. In addition, the welcome offer for the BMO CashBack World Elite Mastercard is very lucrative, even though it’s only available for 3 months. It’s up to you to determine which one is best suited to your habits.
Also note that the cash back earned with the Costco Card can only be used in Costco stores.
BMO AIR MILES World Elite Mastercard
The BMO AIR MILES World Elite Mastercard has an annual fee of $120 (waived for the first year of ownership) and offers huge rewards when you use it at Costco or elsewhere. However, these rewards are in AIR MILES, redeemable for products. In order to be eligible, the minimum annual income required is $80,000 per person ($150,000 per household).
The rewards: BMO AIR MILES World Elite Mastercard
For every $10 spent with your credit card, you earn 1 AIR MILES. You have the option to double your miles when you shop with AIR MILES partners. There is a current offer valid until December 31, 2020, which lets you earn 5x the miles at Shell, on both fuel and in-store purchases. You also get a bonus of 2000 AIR MILES when you spend at least $3000 with your BMO AIR MILES World Elite Mastercard in the first 3 months.
You also get 15% off all AIR MILES flights in North America by purchasing your ticket with the BMO AIR MILES World Elite Mastercard.
The benefits: BMO AIR MILES World Elite Mastercard
Like the previous World Elite card, this card offers more insurance, including vehicle rental insurance. This insurance covers you against collision damage, accidental death or dismemberment occurring while in a rental vehicle, and against theft of personal belongings from the rental.
You get trip cancellation or interruption insurance and flight delay insurance. You are protected for your luggage and personal effects in the event of loss. You have out-of-province emergency medical insurance if you are under 65. You are covered for death or dismemberment when you use public transportation. You have the same insurance as the previous card on purchases.
You too are given a free membership to the Mastercard Airport Experiences Program Provided by LoungeKey, and you get two free VIP Airport Lounge passes each year.
The card entitles you to a 15% discount on all Cirque du Soleil shows in Canada and 20% on shows in Las Vegas, just like the BMO CashBack World Elite Mastercard.
The differences: BMO AIR MILES World Elite Mastercard
The AIR MILES card has reduced accessibility due to the minimum income required, while no minimum income is required for the Capital One Mastercard and its annual fee of $120 ($80 if you have a BMO Performance Plan chequing account). Remember that the Costco card is free of charge. In terms of the rewards, they are very similar. The flexibility of rewards is however greater with AIR MILES. This is because the Costco card is a cash back card for Costco only, while AIR MILES allows miles to be redeemed in several ways. Lastly, the BMO card has a few more benefits than the Capital One credit card.
MBNA Rewards Platinum Plus Mastercard
The MBNA Rewards Platinum Plus Mastercard is free for the primary card and for 9 additional cards. It provides a generous amount of MBNA rewards points, especially on fuel and grocery purchases. No annual income is required in order to be eligible.
The rewards: MBNA Rewards Platinum Plus Mastercard
Some credit cards may have a time limit within which you must use the points. However, for this card, you can keep them as long as you want, as long as your account is open and in good standing.
You get 2 points per dollar spent on all grocery, fuel and restaurant purchases, up to a limit of $5000 in annual spending for each of these categories. For all other types of purchases, you earn 1 point per dollar. After activating the card, you can acquire 10,000 bonus MBNA reward points for meeting certain conditions. First of all, when you sign up for eStatements, you earn 5000 MBNA Reward Points. To get the remaining 5000 MBNA Reward Points, you must make a purchase with the MBNA Rewards Platinum Plus Mastercard within 90 days of opening the account.
You can redeem your points for gift cards, travel, and items in this catalogue or through a credit to your account statement. The travel redemption value is 100 MBNA rewards points for $1, and 200 points for $1 in rebates or charitable donations. For items and gift cards, I invite you to consult the MBNA Rewards Program catalogue to learn more about the different products offered.
The benefits: MBNA Rewards Platinum Plus Mastercard
The card provides insurance on purchases, an extended warranty, and you can save money when you rent a vehicle from Avis or Budget.
Purchase insurance protects an item for 90 days if it is damaged or stolen and applies to many purchases made with the MBNA Rewards Platinum Plus Mastercard. The maximum total lifetime reimbursement is $60,000. The extended warranty doubles the length of the warranty offered by the retailer, to a maximum of one year.
You can get 10% off a vehicle rental with Avis or Budget in Canada and the United States when you make the transaction with your credit card.
The differences: MBNA Rewards Platinum Plus Mastercard
Unlike the MBNA Rewards Platinum Plus Mastercard, the Capital One Mastercard has no limit on how much you can spend per year for each category. The rewards are quite similar. In fact, the Costco card is not as flexible as the MBNA card for redeeming points since the cash back can only be used in its stores. You can use both cards to purchase multiple items or gift cards, but with the Costco card, you cannot purchase travel. Also note that the Capital One Mastercard’s benefits are much greater than those of the MBNA Rewards Platinum Plus Mastercard.
HSBC + Rewards Mastercard
The HSBC + Rewards Mastercard is great if you’re looking for a reduced interest rate on purchases, cash advances and balance transfers, while also earning rewards. In fact, the interest rate is 11.90% and the credit card costs $25 per year. Each additional card costs $10 per year.
The rewards: HSBC + Rewards Mastercard
This reduced rate card offers 2 points per dollar spent on dining and entertainment. For all other types of purchases, it is 1 point per dollar of purchase. This card’s welcome offer is 20,000 points if you spend $2000 with the card during the first 3 months, which equates to $100 in travel rewards. The annual fee is waived in the first year.
You can redeem your points for merchandise, gift cards, financial rewards, and travel. See their catalogue for rewards options.
The benefits: HSBC + Rewards Mastercard
This card’s benefits are similar to those of the previous card. There is coverage that doubles the retailer’s warranty for up to one year. You also have insurance if the product is damaged or stolen within the first 90 days after purchase.
If the price of an item has been reduced within 60 days of purchase, a protection service refunds the difference, up to a maximum of $500 per item and $1000 per calendar year.
The differences: HSBC + Rewards Mastercard
HSBC’s card provides a fairly lucrative welcome bonus, while Capital One’s card offers nothing. Like the MBNA card, it differs from the Costco card in the wide variety of travel rewards it offers. The Capital One Mastercard offers many benefits, while the HSBC card offers very little in comparison.
The Costco credit card is free, while the HSBC credit card costs $25 per year. But interest rates are lower with this card, which gives you more flexibility if you cannot pay your full balance each month.
The information in this article, The Capital One Costco Credit Card: Everything You Need To Know About This Big Box Store’s Credit Cards In Canada has been compiled by Hardbacon, which has designed a credit card comparator listing hundreds of Canadian credit cards. Hardbacon also helps you save on savings accounts, chequing accounts, online brokers, robo-advisors, life insurance, mortgages and personal loans. If you want to go one step further and take control of your finances, you should download Hardbacon’s mobile app, which links to your bank and investing accounts, helps you plan for your financial goals, create a budget and invest better.