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.

EDIT:  This card was closed to new applications in May 2019, sorry

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 22.9% 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.

For people who don’t know Costco, it is a US-based chain of – effectively – cash and carry warehouses.  There are 28 sites across the UK.  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.  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.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.