TrueEarnings® Card from Costco and American Express: Big Savings On Gas

TrueEarnings® Card from Costco and American Express: Big Savings On Gas

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

Editor's Rating

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Good gas rewards credit card that has unfortunately been discontinued
Costco True Earnings Card
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Editor's Rating

?
{"onCurrent":true,"message":"Our team rates credit cards objectively based on independent research, the features the credit card offers users, and how it compares with other available cards in its category. The ratings are the opinion of our editors, and are not influenced by any outside factors, including any compensation the site may receive from certain advertisers.","showIcon":false,"tooltipLabel":"?"}

Good gas rewards credit card that has unfortunately been discontinued
Costco True Earnings Card
This product is not available through ValuePenguin.
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The information related to the Amex TrueEarnings® Card from Costco has been collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

The Amex TrueEarnings® Card from Costco is one of our favorite credit cards to use on purchases of gas. Unfortunately, the credit card has been discontinued.

Good For…Bad For…
  • Individuals with big gas, travel, and restaurant expenses
  • Consumers who wish to use a credit card at Costco stores
  • Long-term value: the card will be discontinued next year
  • Someone who doesn't like any other Amex credit card

Review: Is the TrueEarnings® Card from Costco and American Express Any Good?

Despite some minor shortcomings, the Costco TrueEarnings® credit card from American Express is one of our favorite credit cards for rewards on gas spending. This credit card comes free of charge, for individuals with Costco membership, and provides 2% savings on restaurant and travel spending, and up to 3% on the first $4,000 in gas purchases annually (1% after that). This annual cap on gas spending comes out to about $333 monthly – more than the national average gasoline budget.

The two major gripes we have with the Costco credit card come from restrictions with its rewards redemption and lack of a welcome bonus. All the cash back you earn through the credit card is awarded to users once per year, every February, in the form of a rewards coupon. Most rewards credit cards make their bounties readily available to consumers – at most locked by a minimum spend amount. Furthermore, the lack of a welcome bonus means this card does not have as much of an initial value – given the fact that it will be discontinued in less than a year, it may not make up that difference for most cardholders.

Bottom Line: Consumers who already shop with Costco, and spend a lot of money on gasoline may be hard-pressed to find a better credit card. Decent cash back value on travel purchases, restaurants, and gas is a rewards combination that is hard to come by.

TrueEarnings® Card from Costco and American Express Benefits & Features

The TrueEarnings® Card from Amex is a straightforward cash back credit card, with a particular focus on gas rewards. Cardholders get up to 3% cash back at US gas stations (including gasoline at Costco), on the first $4,000 in purchases each year. Using the TrueEarnings® Card as payment at US restaurants, and some travel purchases get 2% cash back. All other purchases on the card earn back just 1% cash back.

Unlike a majority of rewards credit cards, the TrueEarnings® Card from American Express has no welcome bonus. This greatly hurts the card's short-term worth. As a point of comparison, some of our favorite cash back credit cards offer bonuses as high as $100.

How Do The TrueEarnings® Rewards Work? All the cash back you earn with the Costco TrueEarnings® credit card is awarded to users once a year – in the form of rebate checks, received every February. After receiving their rebate, cardholders have between February and August 31st of the same year to use their rewards. Furthermore, you can only use them for Costco merchandise, or redeem them for cash at a Costco store.

What Will Happen After The Costco TrueEarnings® Card Is Discontinued?

On March 31st, 2016, the TrueEarnings® credit card program is scheduled to end, due to American Express and Costco dissolving their partnership. All Costco TrueEarnings® cardholders will have the option of either closing their accounts or changing them to another American Express product.

What Are Good Replacements for the Costco TrueEarnings® Card?

With the cancellation of the Costco TrueEarnings® Card, consumers can look at many additional credit cards that can serve as good replacements – offering equal or, in some cases, better rewards on gas, restaurants, and travel.

Costco TrueEarnings® Card vs Blue Cash Preferred® Card from American Express

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The Blue Cash Preferred® Card from American Express is another great gas rewards credit card. It matches the 3% rewards rate on gas purchases of the TrueEarnings® Card – though it does not limit it at $4,000 annually. The Blue Cash Preferred® Card from American Express also gives 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 6% Cash Back on select U.S. streaming subscriptions and 1% Cash Back on other purchases. This card does not, however, offer the same rewards on travel or restaurants that we see with the Costco credit card – if these categories are what matter to you most, other options may be a better choice. This card does however come with a $95 annual fee (See Rates & Fees).

For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.

Costco TrueEarnings® Card vs Wells Fargo Propel 365 American Express® Card

Wells Fargo Propel 365 American Express® Card
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For those consumers wanting rewards from gas and restaurant spending, the Wells Fargo Propel 365 American Express® Card is a great option. It matches the reward rate of the Costco credit card in those two categories. The Wells Fargo Propel 365 American Express® Card does, however, come with a $0 Intro Annual Fee for the first year then $45. To compensate for this, a good rule of thumb is to know how much you spend on the categories it rewards you in – you’ll want to at the very least be breaking even. That means spending at least $1,000 annually on gas, and $750 at restaurants.

Joe Resendiz

Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).

Costco True Earnings Card
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