EDIT: This card was closed to new applications in May 2019, sorry!
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.
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.
Want to earn more points from credit cards? – November 2020 update
If you are looking to apply for a new credit or charge card, here are my November 2020 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending Read our full review
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:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.