Nutmeg Avios

Is the Costco TrueEarnings Amex the most generous UK travel credit card?

You’ll have noticed that I have started re-running updated versions of all of our miles and points credit cards.  These articles will run virtually every day for the next couple of weeks.

There is one credit card which will NOT feature in these articles, because it has nothing to do with miles and points.  It may, however, be the most generous UK travel credit card of all!

Whilst Head for Points focusses heavily on the Gold, Platinum, Starwood and British Airways American Express cards, and now the new Amex Rewards credit cards, there are some other products in the portfolio.  There is the Nectar card, the Platinum Cashback cards and a Harrods card.

And the Costco TrueEarnings American Express card.

The representative APR is 19.9% variable.

A couple of years ago, American Express lost its contract to issue Costco credit cards in the US.  This was a huge blow to the company, representing 10% of its global business.  The UK card appears to be staying with Amex for now.

Costco Amex

For people who don’t know Costco, it is a US-based chain of – effectively – cash and carry warehousesThere are 28 sites across the UK, listed here.  They sell a huge range of items and whilst the stores may be cheap-looking the products are not – wine buffs, for example, tend to swear by Costco for cheap Cloudy Bay and Dom Perignon.

In theory, you need to be ‘in business’ to become a Costco member.  In practice, their rules are pretty lax and you may well qualify for individual membership.  Anyone who works in finance, or is a retired employee of a bank, qualifies for example.  There is also a long list of professional bodies that are accepted.  You can see more details here.  If you are self-employed you are definitely OK.  Some big corporates also have company-wide deals for their employees.

Individual membership is £28 + VAT per year.  You should save that pretty quickly.

The Costco TrueEarnings American Express card

The Costco Amex is a very interesting card.  You can find full details on the American Express website here.

There is no sign-up bonus but that is offset by some very generous returns:

No annual fee

1% cashback on all of your spending (capped at £300 per year)

3% cashback on all of your restaurant spending (no cap)

2% cashback on all of your travel spending (no cap)

You can probably see what got me interested here.  If you are a heavy traveller, 2% cashback on all of your travel costs could be a significant amount of money.

There is the usual 3% foreign exchange fee, so if you are spending money on travel abroad you would be better of with an ‘FX free’ card like the Post Office or Halifax Clarity.  If you are paying travel bills abroad and getting repaid by your employer, however, this is very interesting.

It is also a great result for travel spend denominated in £.

Even the 1% cashback on all of your general spend is a decent deal given that the card has no fee.

Note the small print on the cashback

There is one tiny snag on the cashback.  You do not receive cash from Amex – you receive a Costco voucher.  The voucher can be exchanged for cash, but you will need to visit your nearest Costco store to exchange it.  Costco will also take the voucher in payment for goods – but you can ask for cash if you want.

This card only works well for a selected group of people:

You need to qualify for Costco membership and pay the £28 + VAT annual fee

You need to live fairly close to a Costco in order to pick up your cash at the year end

You need to be putting a significant amount of travel spend through your card – and if this spend is in foreign currency, it needs to be your employers spend and your not your own

You would, of course, be giving up Avios points or whatever reward you currently earn when you pay for travel spend.  Except in a very few cases, though, you will find 2% cashback to be a better deal than whatever else you are getting.  Even if you think the miles you are getting are worth 2% or more, cash is substantially more flexible!  You never get availability problems when using cash …..

You can find further details of the Costco Amex on their website here.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

Credit & Charge Card Reviews (3): the NEW American Express Rewards credit card
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  1. The contract with Amex is for another 3 years or thereabouts. Then they will loose the contract in the UK as well.

    • Roger I* says:

      Though AmEx is the only credit/charge card accepted at Costco. No Visa, No MC. At the moment anyway.

      • Can’t use Anex in the USA only Visa.

        • That is my understanding of the situation right now.

          However, in relation to this case and the often cited Marriott sitution, I’d be very cautious on extrapolating from USA policies to RoW.

          Big companies are not foolish, they know the world is very different from country to country – including payment network market share, availability, and consumer acceptance/use of different payment methods (there are major economies where ‘credit’ cards are hardly ever used and also countries with major domestic payment networks).

          Accordingly, I’d not be surprised to such partnership agreements remaining country specifc. They will still get their headlines in the huge USA market from the partnership, but if they attempted to extrapolate from the right decision in what is often the major single market of the USA, they could screw up their ability to develop their business elsewhere.

          So, I don’t personally buy into this ‘single global agreement’ bit. But it is the global aspect I disagree with. If there was a market you probably could pair with the USA – it would be UK. But even then issues with number of issuers, etc.

          (Sorry that’s a lot longer than I intended to write, small screen. Not attacking anyone in this thread, just often see elsewhere on HFP comments about global deals – esp Marriott. I don’t buy that. You’d be mad to give up a partnership with Amex themselves in the UK, a premium credit card brand).

  2. TrainDriverSparky says:

    If you are worried about not being eligible for membership, a mailshot I received stated that holding any UK Amex qualified you. This is not mentioned on the website.
    Showing on my BAPP Amex account is a ‘Spend £100 or more, get £20 back’ offer for my local Costco

  3. Have been a member for years and you can get some decent priced however you need to be careful with big ticket items.

    In the U.K. prices are ex VAT and I have recently been looking for a new TV. What I found at the reading store is that it was more expensive than my local John Lewis.

    Otherwise Cisco is not too bad so long as you can store 50 toilet tools or 24 kitchen rolls.

    UK members can use US stores when they travel using their U.K. cards. Petrol is particularly good value in the US.

    • Yes you do have to watch out for some of the items even though they have low margins it doesn’t mean that everything they brought was at a better price than their competitors.

  4. You can buy stamps at around 6% off face value and you can then spend them towards postage at the post office, useful for some who may send parcels and want to meet a spend target.

  5. Roger I* says:

    Well done, Rob. This is a niche product I had previously overlooked, probably under the mistaken impression that it needed significant Costco spend to make it worthwhile. Also, the nearest branches are 5 and 9 miles away..

    So it’s free, but costs £33.60 p.a. for Costco membership. With better benefits, it’s more attracrive than the AmEx Nectar card. 🙂

    2% on eligible travel bookings looks good. Is there a definition of ‘eligible’? I couldn’t find one on the website.

    • I am guessing that any charge coded airline / hotel / car rental is automatic and then you might end up ringing Amex for more obscure stuff like, say, a National Express ticket or an Italian ferry ticket. That is only a guess though. Will be the same method they use to, say, give double points on Gold airline transactions.

    • Everything that I’d consider travel has correctly posted for my folks, so seems fairly well-coded.

  6. Genghis says:

    Did you lose your £28 in the end?

  7. Good to see this card being covered. I switched my folks to it almost a year ago after they kept letting BA 241 vouchers go to waste – when taking into account the lack of annual fee too this has been a great switch for them!

  8. Let my Costco membership lapse. Every trip
    was £400 + Honestly found better value shopping local. Miss the occasional Tin of poppycock though.

    • the real harry1 says:

      does not compute 🙂

      why would you be spending £400 unless you were finding great prices?

      • The power of of bulk buying… I find I always lose track of spend in a Costco/Makro… lol… Always seem to come out of these kind of places with crap I thought I need but in reality I dont lol….

      • Taking the Mrs and Kids along who loaded up the trolley with stuff we really didn’t need . That computes to my way of thinking.

  9. the real harry1 says:

    @Genghis – would you say getting £200 Xmas Saver in Tesco on my Amex will count as/ look like normal grocery spend?

  10. Have a Amex Costco card for last few years, wanted to know if I apply for the Amex BA Premium plus card would this be eligible for the Introductory Avios points

    • Yes, you’re fine. The Costco Amex has no impact at all on any other Amex card application or bonus.

  11. OT question about Lloyds upgrade voucher. Can I change dates once booked?

  12. Did Amex tell you that you can only have two credit cards? As that rule that is mentioned here sometimes ( 2 credit + 1 charge) seems to have died long ago. I was hit by it a couple of times about 5 years ago. But recently I have held more than that plus a charge card and am usually instantly approved.

  13. O/T You can now open a virgin atlantic flying club account for a child without having status. You would have to call customer service yo do it though.

  14. A bit more info from over-the-pond.

    Citi is the issuer in the US on the Visa network. In Canada, Amex lost the co-brand partnership to Capital One and MasterCard.

    From a Canadian perspective: Petrol is cheaper in Canada at Costco.

    Costco Membership (not the credit card) is at 2 levels. Basic gets you 1% back on all your spend in the warehouse (except petrol). executive gets you 2% back. If you don’t get enough back to justify the Executive fee, they refund you the difference in the fees – so a great incentive.

    Their return policy is fantastic. Can return anything (excluding electronics) at anytime without a receipt. Found a pack of 48 batteries (!) that was bought in March (don’t even remember getting them) and returned them this week. No questions.

    Capital One credit card is rubbish. No sign up by bonus. And the offer is : 1% on anything. 2% on petrol. 3% on restaurants. US offer is better.

    Supposedly Visa is the big winnner in the US and MC in Canada as you can use any Visa /MC not just the cobranded ones. Citi supposedly is losing money on the deal….because they haven’t converted all the 11MM Amex members.

    • The_real_a says:

      There is a similar concept of exec membership in the UK with cashbook. Cannot remember the threshold. Their return policy is fantastic, I have returned a 5kg of coffee beans as I didn’t like them (they were horrid in my defence) – electronic returns are a dream if it breaks they just replace it. Also you can have a free lunch with all of the food sampling stations dotted around.

  15. Wally1976 says:

    OT – sorry no ‘bits’ article today.

    Harry, aka TRH1 – in case you haven’t seen on the article from the weekend, my HUKD ID is petewally1976. Thank you muchly 🙂

  16. OT – I upgraded from BA free card to BAPP Amex. On the app I can see a counter to get 25,000 bonus avios by spending £3k. The timeline is a bit tight (based on the original date I ordered the free BA card) so not sure if I should push it to try and reach the target? I could make it and Amex could quite rightly refuse to pay out.

    Has anyone been paid the extra Avios on a BAPP upgrade recently?

  17. It’s worth noting that anyone can join in Canada / US. Not just businesses. You pay C$60 annual and it’s a global membership. As a Canadian resident, I’ve used my card in USA and UK without issue. Also opens you up to use Costco travel services, which unexpectedly have competitive rental car prices.

  18. Chelseafi says:

    If you use an SPG amex card you only get half a point for every £1 as its classed as wholesale but if you use BAPP you still get 1.5 points per £1, so just check what card you’re paying with. Also I love Costco customer service excellent as are the products

  19. can anyone clarify what falls under travel spending? Just transportation or accommodation also? The amex website is not helpful in spelling out exactly what types of expenditure qualify.