Author Topic: 6.5% back at Costco  (Read 2175 times)

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6.5% back at Costco
« on: January 10, 2023, 11:59:39 AM »
The executive membership gets you 2% cash back at Costco for an extra $60 a year. If you don't get at least $60 back, you can go to the membership desk and they will reimburse the difference between your rebate check and $60.

We have been using the US Bank Altitude Reserve card for a few years now for its 3 points/$ whenever you use tap to pay - Apple Pay, Google Pay, Samsung Pay. The points are worth 1.5c each when you use them toward travel. USB has a pretty slick system that texts and asks you if you would like to use points to pay for a purchase whenever it detects a travel payment. The card is $400/yr with a $325 travel credit so it nets out to $75.

Put the two together and you are getting 6.5% back. You do have to have high enough spending to offset the fee. In our case we spend $5K/yr at Costco and an additional $31K on the USB card. That's a $100 Costco rebate and $1620 in travel credit. 

FIPurpose

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Re: 6.5% back at Costco
« Reply #1 on: January 10, 2023, 12:50:16 PM »
This math doesn't make any sense to me.

You have a card that is 1.5% but only usable on travel expenses., but you pay $75 for the privilege

Costco is 2% back, but you had to pay $60 for the privilege.

So then the $5k you spent at Costco gave you net $40: So 0.8%

And I don't know what spending 31k on places other than Costco has to do with how much of a percentage you get back.

Your title should be that you got ~2.3% cash back at Costco.

Just use a Fidelity credit card and get 2% back in cash and no annual fee.

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Re: 6.5% back at Costco
« Reply #2 on: January 10, 2023, 01:08:20 PM »
This math doesn't make any sense to me.

You have a card that is 1.5% but only usable on travel expenses., but you pay $75 for the privilege

Costco is 2% back, but you had to pay $60 for the privilege.

So then the $5k you spent at Costco gave you net $40: So 0.8%

And I don't know what spending 31k on places other than Costco has to do with how much of a percentage you get back.

Your title should be that you got ~2.3% cash back at Costco.

Just use a Fidelity credit card and get 2% back in cash and no annual fee.

3 pts/$ worth 1.5c each is 4.5% back on travel. So for $5k in Costco spend, it is $325 back (6.5% of $5k). That is $190 once you subtract the $60 executive upgrade and if you want to ascribe the whole $75 fee for the USB card to your Costco spend. So call it 3.8% to 5.3% ($190-$265 on $5k of Costco spend). 

If you want to get technical - $36K in spending with $5k at Costco means $10.5 of the $75 AF is attributable to Costco so its 5.1% back.

kpd905

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Re: 6.5% back at Costco
« Reply #3 on: January 11, 2023, 10:41:35 AM »
Chase Freedom and Discover It used to make Wholesale clubs one of their categories for 5%, so I would always load up on Costco gift cards for the year during that quarter.

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Re: 6.5% back at Costco
« Reply #4 on: January 11, 2023, 01:16:18 PM »
We have an executive membership (Costco is our primary "grocery store"), & the Costco visa card, which has no fee. Have you looked at that? (not a referral link). https://www.citi.com/credit-cards/citi-costco-anywhere-visa-credit-card

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Re: 6.5% back at Costco
« Reply #5 on: January 11, 2023, 02:55:49 PM »
We have an executive membership (Costco is our primary "grocery store"), & the Costco visa card, which has no fee. Have you looked at that? (not a referral link). https://www.citi.com/credit-cards/citi-costco-anywhere-visa-credit-card

Us too. We get most of our gas at Costco since it's on husband's way to work and the gas station opens earlier than the main store.

EchoStache

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Re: 6.5% back at Costco
« Reply #6 on: January 12, 2023, 09:21:21 AM »
I feel as though we save a lot more by paying cash and not getting cash back on groceries.

sonofsven

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Re: 6.5% back at Costco
« Reply #7 on: January 12, 2023, 11:13:34 AM »
I feel as though we save a lot more by paying cash and not getting cash back on groceries.
How do you figure? Because you aren't paying for a Costco membership?
Between the Costco Visa and the Executive 2% I get back quite a bit more than the membership cost.

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Re: 6.5% back at Costco
« Reply #8 on: January 12, 2023, 12:51:02 PM »
We have found playing the credit card game has paid off in the long run.

The Costco card is a money maker for us. We use it similar to you.

The Sapphire card is almost better for travel as it includes travel insurance, has a good cash back program and with it and everything else hubby fandangoed (there was a spreadsheet involved)  we were able to get braces for our preteen for 2K out of pocket. And anyone who has paid for braces know that this is cheap overall.


EchoStache

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Re: 6.5% back at Costco
« Reply #9 on: January 12, 2023, 01:10:09 PM »
I feel as though we save a lot more by paying cash and not getting cash back on groceries.
How do you figure? Because you aren't paying for a Costco membership?
Between the Costco Visa and the Executive 2% I get back quite a bit more than the membership cost.

I feel that by sticking to a strict cash budget, we spend a lot less on groceries than 2-5% cash back if we are swiping a card instead. Although I’m sure not the case for everybody, it’s easy to fall into the trap of just buying whatever, swiping, and thinking HA! I got one over on the credit card company….paying off my balance in full , so it’s free since no interest, and I got FREE money back. Unless you spend $50/week more by not carefully sticking to a budget. I rather spend $50 less than save 2% on a much higher total. I think this is a logic fallacy many people fall into without realizing it. 

Now if it’s a *fixed* purchase like, I’m buying a $1200 stove, period, then yes getting 2 or 3% cash back is indeed a discount. But on an extremely controllable expense like groceries it’s very easy to spend a lot more by swiping. And it’s easy to justify…..it’s groceries, we NEED them, we’re going to buy them anyways.

But for us personally, there are countless times when using cash changes the way we spend…with a card we would just swipe and justify it, smugly knowing we are getting 2% back. But in the end the credit card company is laughing all the way to the bank knowing you spend more using a card.

MaybeBabyMustache

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Re: 6.5% back at Costco
« Reply #10 on: January 12, 2023, 01:43:07 PM »
I feel as though we save a lot more by paying cash and not getting cash back on groceries.
How do you figure? Because you aren't paying for a Costco membership?
Between the Costco Visa and the Executive 2% I get back quite a bit more than the membership cost.

I feel that by sticking to a strict cash budget, we spend a lot less on groceries than 2-5% cash back if we are swiping a card instead. Although I’m sure not the case for everybody, it’s easy to fall into the trap of just buying whatever, swiping, and thinking HA! I got one over on the credit card company….paying off my balance in full , so it’s free since no interest, and I got FREE money back. Unless you spend $50/week more by not carefully sticking to a budget. I rather spend $50 less than save 2% on a much higher total. I think this is a logic fallacy many people fall into without realizing it. 

Now if it’s a *fixed* purchase like, I’m buying a $1200 stove, period, then yes getting 2 or 3% cash back is indeed a discount. But on an extremely controllable expense like groceries it’s very easy to spend a lot more by swiping. And it’s easy to justify…..it’s groceries, we NEED them, we’re going to buy them anyways.

But for us personally, there are countless times when using cash changes the way we spend…with a card we would just swipe and justify it, smugly knowing we are getting 2% back. But in the end the credit card company is laughing all the way to the bank knowing you spend more using a card.

We have a shopping list, and unless we see an item we regularly buy on a great sale, we stick to the list. If it's on sale, we consider it a pre purchase vs buying it when it's not on sale. I'd say that happens with like 3 grocery items/month, so not a big use case. And, it's actually the merchant who would largely be benefiting for you spending more than intended. The credit card processor is collecting a few percents, but the merchant is the bigger winner.

fuzzy math

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Re: 6.5% back at Costco
« Reply #11 on: January 13, 2023, 08:32:19 AM »

 I rather spend $50 less than save 2% on a much higher total. I think this is a logic fallacy many people fall into without realizing it. 

 And it’s easy to justify…..it’s groceries, we NEED them, we’re going to buy them anyways.

 But in the end the credit card company is laughing all the way to the bank knowing you spend more using a card.

The process you are describing likely involves doing a running total at the store as you put items in your basket. If it doesn't, you should implement it.  At that point ("I'm only spending $75 today at the store for ______ items") the payment method is irrelevant.

I read a few of your posts, one about how you justify spending $3500 extra on a $57k Tesla because "I'm already spending the money so I'm going to get what I want" and I just want to say that it sounds like you are still struggling with the logistical fallacy that you're so sure you've cured yourself of. It takes 70 weeks of saving $50 at the store to compensate for buying sport tires and red paint. But those are your justifications and you're allowed to have them. If food spending isn't your priority, just state it. For some others, vehicles are just a waste of $$ and a depreciating item that gets you from point A to B.

 There are many people on this board who have managed to confront their spending issues in the past and can easily substitute methods of payment. Your tone on this post was a bit off for me  (the banks are laughing at you!!!) which is why I searched out your other posts.

sonofsven

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Re: 6.5% back at Costco
« Reply #12 on: January 13, 2023, 08:47:19 AM »
I feel as though we save a lot more by paying cash and not getting cash back on groceries.
How do you figure? Because you aren't paying for a Costco membership?
Between the Costco Visa and the Executive 2% I get back quite a bit more than the membership cost.

I feel that by sticking to a strict cash budget, we spend a lot less on groceries than 2-5% cash back if we are swiping a card instead. Although I’m sure not the case for everybody, it’s easy to fall into the trap of just buying whatever, swiping, and thinking HA! I got one over on the credit card company….paying off my balance in full , so it’s free since no interest, and I got FREE money back. Unless you spend $50/week more by not carefully sticking to a budget. I rather spend $50 less than save 2% on a much higher total. I think this is a logic fallacy many people fall into without realizing it. 

Now if it’s a *fixed* purchase like, I’m buying a $1200 stove, period, then yes getting 2 or 3% cash back is indeed a discount. But on an extremely controllable expense like groceries it’s very easy to spend a lot more by swiping. And it’s easy to justify…..it’s groceries, we NEED them, we’re going to buy them anyways.

But for us personally, there are countless times when using cash changes the way we spend…with a card we would just swipe and justify it, smugly knowing we are getting 2% back. But in the end the credit card company is laughing all the way to the bank knowing you spend more using a card.
I put all my spending on cc's for the sign up/spend bonuses mainly, so any cash back points are just extra.
If you have the discipline you describe you should do it, too, because you will save money; that's just math.
I understand many people have a bad feeling about cc's and debt and out of control spending, but if you can stick to your cash budget you can do the same with a cc.
Just keep that discipline and only buy what's on your shopping list.

ohsnap

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Re: 6.5% back at Costco
« Reply #13 on: January 15, 2023, 06:38:33 AM »
This math doesn't make any sense to me.

You have a card that is 1.5% but only usable on travel expenses., but you pay $75 for the privilege
...

We have this card also and use it anywhere that takes Apple Pay unless there's an otherwise bonus spend category at 5%.

It's very easy to cash out these points - your don't have to travel to do it.
1. Notice your point balance is up to over $100 (just my threshold - I think anything above $10 can be cashed out on air travel)
2. Browse Southwest Airlines website for a ticket that's just under (your point balance)*.015
3. Book your ticket
4. Reply to a text from Real Time Rewards
5. Don't forget to cancel the ticket and ask for a refund within 24 hours.

The whole process takes about 10 minutes.

We do spend $ on travel so I don't always have to cash out this way - US Bank might shut you down if you do it too frequently.

LiveLean

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Re: 6.5% back at Costco
« Reply #14 on: January 25, 2023, 07:39:59 AM »
I don't have a Costco credit card but I've had the executive membership for many years. Here's how I look at Costco math:

1. If you did nothing else but buy gas weekly at Costco, the savings would more than pay for a Costco executive membership.
2. The price of some things is so low you wonder how Costco justifies it -- i.e. two dozen roses, Rotisserie chicken, etc.
3. Costco beats grocery stores, Wal-Mart and Target on almost everything grocery and household related. It's a myth that Costco only sells giant sizes. (Okay, toilet paper is an exception, but like you're not going to use 36 rolls of TP eventually.)
4. When you do 95 percent of your overall shopping at Costco as I do, the time savings alone is staggering. I probably only go into a grocery store 3-4 times a year.
5. Very happy with my Costco stock purchase from 2006.

Must_ache

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Re: 6.5% back at Costco
« Reply #15 on: January 25, 2023, 10:59:38 AM »
one about how you justify spending $3500 extra on a $57k Tesla
That's many thousands more than I will ever spend in my new Civic and gas, and I'm not accounting for the Tesla electricity.

ohsnap

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Re: 6.5% back at Costco
« Reply #16 on: January 25, 2023, 01:14:25 PM »
...

1. If you did nothing else but buy gas weekly at Costco, the savings would more than pay for a Costco executive membership.
...

Exactly! I save the more than the membership price on gas alone. I save more than the membership cost on eggs alone. Probably save more than the membership price on cheese alone!

Chris Pascale

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Re: 6.5% back at Costco
« Reply #17 on: January 30, 2023, 01:14:25 PM »
Bc Costco is my nearest grocery store, we now go there.

One positive is that I went in there with a leaking tire. They plugged it for something like $8.00 (might have been $12.00) and were not allowed to accept a tip.

What I don't like is that I buy a few items and spend $100. Also, no grass-fed cow's milk, and their Naked juice is only in little bottles instead of a large one.

 

Wow, a phone plan for fifteen bucks!