I personally have a Costco membership. And I find that they offers a much better shopping experience than BJs. If you are a member, you would have known by now that you need an American Express card to pay for your purchases. If you do not have an Amex card, a debit card will actually do.
Another benefit is that you may be lucky enough to have a Costco near your place with their gas station. Their gas prices tend to be cheaper and you could achieve quite a lot of savings with this card. Their gas stations only accept American Express cards and debit cards.
Since you can use any Amex cards there, the question is should you get their affinity card? Well, it depends on a few factors. But before we get into that, let's start with a broad overview of their card and rewards.
Gasoline - With this card, 3% Cash back at US standalone gas stations and on gasoline at Costco up to $4,000 per year in purchases, then 1%. That means that once you have exceeded the $4,000 threshold, you will earn 1% for gasoline purchases for the rest of the year. The one thing you have to note is that gas stations from folks like Kroger and Walmart are not considered to be standalone stations and so you will not earn the 3% cash back.
Eligible travel and restaurant expense - Another nice benefit is that cardholders are able to earn 2% cash back on dining expenses. So while this may not be an airline card where you earn miles for travel, you can get the 2% cash back for travel. It is also nice that you can get 2% on dining expenses. (More details here).
Base rate - For other eligible purchases that do not fall into the above spending categories, you earn a standard 1% cash back. If you are alert, you would have noticed that shopping at Costco does not earn you higher than the 1% cash back. This is in contrast to other "wholesale warehouse affinity cards".
For example the BJ's credit card allows you to earn 2% rebates at BJ's store and 1% on other regular purchases. The Costco has it the opposite way round. You can earn 3% cash back on gasoline and 2% on travel, restaurants. So in terms of actually earning more than 1% at the store, BJ beats Costco, but Costco has more categories that let's you earn more than 1%. However, by simply being a Costco member, you will already earn cash back from your purchases just from being a member and without this card. So the extra 1% can be considered a bonus.
It is also interesting to contrast Costco's rewards with Sam's Club Discover Cards. The rebate formula is different for Sam's Club members and non-members. The rewards percentages for Sam's Club Advantage Plus Members are .25% on total purchases up to $1,500, .50% on total purchases from $1,500.01 to $3,000, 1% on total purchases from $3,000.01 to $5,000, 1.75% on total purchases from $5,000.01 to $10,000 and 2% on total purchases from $10,000.01 to $250,000. Once your spending exceeds $250,000, you will not earn anymore rebates.
It is really hard to compare these two cards simply because of the different rebate formula. At a certain spending level, the Sam's Club Discover Card might give you more rebates. And the Sam's Club Discover Card actually pays you more than 1% rebate for purchases at Sam's Club (though you have to exceed their spending threshold).
How Do You Redeem Your Cash Back? - You can redeem the cash back you have earned every year by either getting your cash back at a Costco cashier or by using it for your Costco purchases. Every year, you will be given a Costco Annual Reward Coupon. By making you go to a store to collect your cash back, they are counting that you will be on another shopping spree!
Annual Fee - There is no annual fee for this card. But you do have to be a member to have this card and hence you will have to pay your annual membership fees. Essentially, this is a two in one card, an American Express and Costco Membership Card. If you apply and are not already a member, then you will be enrolled.
1. American Express Becomes First and Only of Big Three to be accepted at Costco Warehouses