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True Earnings Card vs Blue Sky from American Express

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Editor's Rating:
Intro Purchase APR Regular APR Intro Balance Transfer Annual Fee Credit Needed
N.A. No Annual Fee with your paid Costco Membership Excellent
Executive Summary - Many people who are contemplating the Blue Sky from American Express also ask if this card would be a better choice since you get 2% cash back on travel. The way the travel rewards work is slightly different as we will explain here.

We mentioned that only American Express credit cards can be accepted in Costco. So technically, you do not need to have a Costco credit card even though you are a Costco member.

Many readers have looked at the fact that you can earn 2% cash back on travel and wonder if they should get this card instead of the Blue Sky from American Express, which also allows you to book your travels with anyone?

To answer this question, we have to look at how both cards work with regards to travel rewards.

  • How Costco Travel Rewards Work? - We've mentioned this earlier but let's look at this issue again. When you book your travel with Costco, you will earn 2% rebate. You can book it with anyone, online or off-line agents and even directly with airlines, hotels, cruise and car rentals.

  • How the Blue Sky Rewards Work? - Unlike, Costco, you do not earn any cash back when you book your travel. Instead, you earn points from your regular spending. And you can use those points when you book your travel. Like Costco, you can book your travel with anyone you wish. This means you can get the best deals and mix and match your plans. 7,500 points gets you $100 in statement credits for travel expenses.

Here are the subtle differences between the two cards.

  • You can earn frequent flyer points with Costco's affinity card - Because you do not use any "points" to redeem for travel, using the card from Costco allows you to actually earn frequent flyer miles or frequent guest points. Plus, you get 2% cash back. The Blue Sky system works differently. While you cannot earn frequent flyer miles, you can actually get a free ticket, or hotel room.

    No system is better. Both are just different.

  • - With Costco, 2% cash back is earned on travel expenses. For the Blue Sky rewards, 7,500 points equals $100 which means the value is 1.33%, So even though they are really different programs, Costco comes out ahead in terms of value.

  • Costco has more ways to earn more cash back - Aside from travel, you can earn 2% cash back on restaurants and 3% cash back at gasoline stations and Costco stations (up to $4,000 in annual spending). With the Blue Sky program, you simply earn one point per dollar that you spend on the card.

  • Travel Accident Insurance from Blue Sky Is Not Free - Another underlooked factor when doing comparisons with these two cards is that the Travel Accident feature from the Blue Sky program requires enrollment is is not free. Furthermore, it only applies to air travel. The coverage is more generous (up to $2 million) though. With Costco, the coverage is only $100,000, but it is free and covers any travel from port of departure to port of arrival.

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