Credit Cards

Is Costco Considered A Grocery Store For Credit Cards

Is Costco Considered A Grocery Store For Credit Cards

Debating whether to get a Costco membership or not? You may be wondering if they're classified as a grocery store for credit card purposes. If you regularly use credit cards to earn rewards and maximize your spending, then you're probably questioning whether your purchases at Costco will qualify for those lucrative extra points. We're here to answer that question, debunk any misconceptions, and help you make an informed decision. Get ready to dive into the world of wholesale club shopping and credit card rewards in a way you never thought possible!

What is Costco?

Costco Wholesale is the third-largest retailer in the world and operates a membership-based business model. They offer a wide range of products at wholesale prices in a warehouse setting, catering to both individuals and businesses. Services offered include groceries, electronics, household essentials, clothing, and more, all at great prices.

How do credit card grocery rewards work?

Many credit cards offer bonus rewards when used at certain merchant categories, like grocery stores, gas stations, or restaurants. This is particularly useful for cardholders who want to maximize their rewards and cashback opportunities. However, not all stores fall into these categories as defined by the merchant category codes (MCCs) assigned to each retailer.

Is Costco considered a grocery store for credit cards?

Unfortunately, Costco is not classified as a grocery store according to the MCCs. Instead, they are considered a 'Wholesale Club,' which falls under a different merchant category code. This means that if you have a credit card that offers bonus rewards at grocery stores, those rewards will not apply for your purchases at Costco.

Why the distinction matters for rewards earners

Understanding the difference in merchant categories can impact your rewards-earning strategy. For example, if you planned on using a credit card that offers 5% cashback on groceries, you would not receive that bonus at Costco due to the different MCC. This distinction could make a difference in your overall rewards and savings, and lead you to reconsider if a Costco membership is right for you.

How to maximize rewards at Costco

Just because Costco isn't classified as a grocery store for credit cards, it doesn't mean you can't still earn rewards on your purchases. Here are a few ways to maximize your rewards at Costco:

  1. Use a credit card with Rewards for Wholesale Clubs: Some credit cards specifically offer bonus rewards or cashback on wholesale club purchases. Look for cards that cater to this merchant category to reap benefits at Costco.
  2. Get the Costco Anywhere Visa Card by Citi: This card offers 2% cashback on all Costco purchases, 4% on eligible gas purchases, 3% on restaurants and travel, and 1% on all other spending. If you're a regular Costco shopper, this card can help maximize your rewards.
  3. Shop at instead of in-store: may sometimes have a different MCC than the physical store, allowing you to potentially earn grocery rewards or other bonus categories. Be sure to verify the specific MCC before completing a purchase online.

Is Costco Considered A Grocery Store For Credit Cards Example:

Let's imagine you have a credit card that earns 3% cashback on groceries and 1% cashback on general purchases. You decide to become a Costco member and start shopping there for your groceries. You're expecting to earn 3% cashback, but because Costco is classified as a wholesale club instead of a grocery store, you're only earning 1% cashback on your Costco spending.

By understanding the difference in merchant categories and adjusting your strategy, you could switch to a credit card that offers higher rewards for wholesale club purchases, or apply for the Costco Anywhere Visa Card by Citi to maximize your rewards at Costco.

Now that you know the difference between grocery stores and wholesale clubs like Costco, you can set up your credit card rewards strategy accordingly. Stay informed and make smart decisions when using credit cards to optimize your savings and rewards potential. If you found this guide helpful, don't forget to share it with your friends and explore our other Flik Eco resources for more personal finance and investing tips. Keep navigating the ever-evolving world of credit cards and rewards, and watch your savings grow with the right strategy in place!


About Jermaine Hagan (The Plantsman)

Jermaine Hagan, also known as The Plantsman is the Founder of Flik Eco. Jermaine is the perfect hybrid of personal finance expert and nemophilist. On a mission to make personal finance simple and accessible, Jermaine uses his inside knowledge to help the average Joe, Kwame or Sarah to improve their lives. Before founding Flik Eco, Jermaine managed teams across several large financial companies, including Equifax, Admiral Plc, New Wave Capital & HSBC. He has been featured in several large publications including BBC, The Guardian & The Times.

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