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

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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.

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.

Costco Amex

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 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.)

Comments (47)

  • 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 🙂

  • G says:

    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?

  • Canuck says:

    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.

  • 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

  • Albert says:

    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.