Executive Summary -
One of the little known fact is that Costco gas stations are not classified as standalone gas stations. And that has implications on whether any other "gas cards" can earn extra cash back at their stations. In this part of our review, we look into this in more details.
As we mentioned in our introduction, this card pays 3% cash back when you use your card at standalone gasoline stations and also at Costco gas stations. But there are some details that you need to be aware of.
Costco Gas Station only accepts American Express, Debit Cards and Costco Cash Cards - If you have a Costco gas station near your house and you intend to fill your gas there, you have to be aware that their stations only accepts American Express cards, their cash cards and debit cards. Visa, MasterCard and Discover are not accepted at Costco. They do not even accept cash and checks. That means (unless you are a debit card holder), you must be a Costco member to use their stations.
Costco is not considered a standalone gas station - Whether a gas station is considered a standalone one depends on how it chooses to classify itself when they sign up with a merchant processor. A station like Shell, BP, Sunocco is clearly a standalone one because that is their only business.
Costco is not a standalone station because it is classified as a discount warehouse. The implication of this is that if you use another card like the Blue Cash Everyday from American Express or the American Express Premier Rewards Gold Card, you will not earn the extra rebates or points at Costco because of how Costco stations are classified.
For you to get the most bang for the buck on Costco gas stations, you do need to use this card so you can earn 3% cash back. The Blue Cash Everyday will only earn you 1% cash back even though they pay 2% cash back at "standalone gas stations".
Costco Gas Stations Do Not Sell Diesel - Another thing to be aware of is that Costco does not sell deisel fuel at their stations. Their rational is that they do not have enough customers using diesel to enable them to purchase in enough quantity to get discounts which they could pass on to their consumers. So if your vehicle uses diesel and you want to use Costco for your gas because of the savings, you are out of luck.
We Suggest You Avoid Debit Cards - Another thing to take note of is that even though Costco accepts debit cards at their stations, you really want to avoid using it. There are two ways that your debit card is being processed. If your debit card uses a PIN based transaction, it will work the following way. One you swipe the card and enter you rPIN, Costco will seek a pre-authorization from the bank account tied to your card for $100. When that is done, you are allowed to fill up to $100 worth of gasoline. The implications of this is that you will need to have at least $100 loaded on the card. Once you have filled your gasoline, the actual amount that you purchased will be sent to the bank and that amount will be deducted from your debit card.
However, instead of using a PIN transaction, some debit cards uses Signature based transactions. If your card is of such type, then the pre-authorized $100 may be held for up to three days. That means that you will lose the ability to use the $100 that was "held" for a couple of days.
After looking at the above facts, all we can say is that if you use Costco gas station for your gas, then you should definitely get this card.
Costco Gas Q&A
Table Of Contents