For years, the Costco Anywhere Visa Card by Citi was the only credit card I had. I thought I was doing great with it. The rewards certificate shows up once a year, it feels like free money, and life moves on.

Here's the thing nobody ever pointed out to me: that card is only really good in two places. Everywhere else — which for most of us is most of our spending — it's paying you the same flat 1% you'd get from a card you found in a cereal box. And if that's the only card in your wallet, or you're using any card that tops out at 1%, you are quietly leaving real vacation money on the table every single month. That's the whole point of this article. Everything else below is just the receipts.

What the card actually pays you

On paper, this card looks pretty good, and it kind of is:

  • 4% back at Costco, if you're an Executive member
  • 5% back on gas at Costco stations, 4% at every other gas station
  • 3% on restaurants and eligible travel (Costco Travel included)
  • 1% on everything else you buy, all year

Read that last line again. Your electric bill. Groceries anywhere that isn't Costco. School supplies. Your kid's birthday present. Amazon. All of it — 1%.

That's not a flaw in the card. It's just what the card is for: it's a Costco loyalty card that happens to also be a credit card. It was never built to be the one card that covers your whole financial life, and once you see that, the rest of this makes a lot more sense.

Where the good rates actually stop

Even the parts of the card that pay well have a ceiling, and nobody sends you a letter when you hit it.

Gas caps at $7,000 a year. Costco gas and every other gas station you use pull from the same pot. Cross $7,000 in a year and you drop straight to 1% on gas for the rest of the year — same pump, same card, nothing tells you it happened.

The membership rewards cap at $1,250 a year. No matter how much you run through the warehouse, Costco isn't paying you more than that.

Is the membership fee even worth it?

Here's the question I'd never actually sat down and answered before: how much do you need to spend at Costco just to make the $130-a-year Executive membership pay for itself?

The math is simpler than it sounds. Executive membership pays you back 2% on top of the card's 4%, so between the two, you're earning about 4% total at Costco. To earn back a $130 fee at 4%, you need to spend:

$130 ÷ 4% = $3,250 a year at Costco — about $271 a month.

If you're spending more than that at Costco, the membership is paying for itself and then some. If you're not, you're paying $130 for the privilege of a card that, outside of gas and Costco, pays like any other basic card.

Why 1% is the real problem

Here's the part that actually changed how I think about this. No single travel rewards card pays well on everything — that's not how they work, and any card claiming otherwise is being generous with the truth. What actually works is pairing a couple of cards together, so between them, you always have one in your wallet paying more than 1% no matter what category you're spending in. That's a strategy, not a single piece of plastic — and it's a completely different game than what a Costco card, or any one-card wallet, is set up to do.

Let's put a real number on it. Say you spend $2,500 a month on everything outside Costco and gas — that's $30,000 a year. At 1% back, that's $300 a year. Move that same spending to a card paying 2%, and it's $600. That $300 difference, by itself, already covers the Costco membership fee twice over — and plenty of travel cards pay more than 2%.

There's a second part too: where those rewards actually go. The Costco certificate shows up once a year and gets spent at Costco. That's it. Points from a good travel card aren't stuck in one store — they can turn into an actual flight, an actual hotel room, on your schedule.

So the real issue was never that the Costco card is bad. It's that 4% in two categories and 1% on everything else isn't the complete plan it feels like. It's one piece of a bigger strategy — and for years, I was treating it like the whole strategy.

How I actually found this out

I wanted more vacation out of the money we were already spending anyway, so I did what most people do — went to YouTube, watched a few videos, and opened up a couple of new cards based on what sounded confident at the time. Both were wrong for me. One had an annual fee for perks I was never going to use. The other locked my points to a single airline, so the only way to use them was to fly that airline, on their schedule, at their price. One of those sign-up bonuses is gone for good — you only get it once.

It took someone I know through work, who actually knows this stuff, sitting me down and explaining how it's supposed to work before any of it made sense. That's really the reason this whole channel and site exist — so you don't have to burn a sign-up bonus finding it out the hard way like I did.

The takeaway

I still have my Costco card. I'm not telling you to cancel it — if Costco is where a lot of your money goes anyway, it's doing exactly what it's supposed to do. The point isn't that this card is bad. It's that if it's the only card in your wallet, you're running your entire financial life on 1% back, and there's a lot more sitting on the table than that.

Want to see some real-world strategies that I — and others — use to turn everyday spending into free vacations? Follow @ChasingSummerPoints on YouTube and I'll show you.

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