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

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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.

Costco Amex

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? – 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:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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.

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

18,000 bonus points and 1.5 points for every £1 you spend 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 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.

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Capital on Tap Business Rewards Visa

Huge 30,000 points bonus until 12th May 2024 Read our full review

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.

Barclaycard Select Cashback Business Credit Card

1% cashback uncapped* on all your business spending (T&C apply) Read our full review

Category

American Express Membership Rewards

Comments (47)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Lee says:
    16 Oct16 October 06:14

    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:
      16 Oct16 October 06:46

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

      • Paul says:
        16 Oct16 October 06:51

        Can’t use Anex in the USA only Visa.

        • David says:
          16 Oct16 October 09:05

          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).

  • TrainDriverSparky says:
    16 Oct16 October 06:37

    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

  • Paul says:
    16 Oct16 October 06:49

    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.

    • Mr Dee says:
      16 Oct16 October 06:51

      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.

  • Mr Dee says:
    16 Oct16 October 06:53

    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.

  • Roger I* says:
    16 Oct16 October 06:58

    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.

    • Rob says:
      16 Oct16 October 08:26

      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.

    • Alan says:
      16 Oct16 October 20:10

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

  • Genghis says:
    16 Oct16 October 07:10

    Did you lose your £28 in the end?

  • Alan says:
    16 Oct16 October 07:36

    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!

  • Simon says:
    16 Oct16 October 08:27

    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:
      16 Oct16 October 09:00

      does not compute 🙂

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

      • RTS says:
        16 Oct16 October 09:36

        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….

      • simon says:
        16 Oct16 October 10:04

        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.

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