Amex Costco True Earnings, Chase Amazon Visa, and Costco Executive Membership – A Great Reward Combination!

We were not credit card savvy when we started out and our saga of mistakes (blunders) started with a GM Master Card in the late 1990s followed by a Discover Card in the early 2000s. The GM Master Card earned us 5% cash reward that could be applied towards the purchase of a new GM car. The closest we ever came to buying a GM car was a Saturn in the 2000 timeframe, when it was marketed as a new benefit. Ultimately, we never got around to buying a GM car and so all the accumulated rewards were for naught. The tiered rewards and the fact that not all places accepted the Discover Card sealed its fate.

Replacing the GM Master Card, was the Chase-Amazon Visa card that offered 3% rewards for Amazon purchases and 1% for everything else. The reward is immediate and since we frequent Amazon.com, the switch panned out.

We are regulars at Costco and used their basic card with American Express called the Cash Rebate Card. That card offers a tiered cash reward program that can be used towards Costco purchases. The tiered program is just 0.25% for the first $2000, 0.5% for the next $3000, and 1.5% for the amount over $5000 in purchases. Our rewards for 2007 added up to about 0.85% and our average purchases were about $500/month. What we failed to recognize until later was the fact that switching to Amex-Costco True Earnings card would have realized us far better cash back: 3% in restaurants and gas, 2% in travel, and 1% on everything else. Further, given our level of spending at Costco, an executive membership made better financial sense even after accounting for the increased (around double the basic) annual membership fee. Purchases at Costco are eligible for a 2% reward redeemable with future Costco purchases: Executive Membership wins hands down if your annual purchases at Costco add up to $2500 or more. The 2% is in addition to the tiered Amex card rewards. Here again, although we lost out in rewards for a couple of years, the switch was finally made in 2008 and that has worked out really well.

Summary:

During the 2006-2007 timeframe, our plan was to use Amex-Costco cash rebate card for Costco purchases and to use the Amazon-Chase Visa card for all other purchases. This combination realized us a reward level of slightly less than 1% on Costco purchases, 3% on Amazon purchases, and 1% on all other purchases. Below is a table that summarizes our altered plan for 2008 onward. This has helped us maximize credit card rewards:


PurchasesStoreCardRewards
GasCostco Gas StationAmex-Costco True Earnings3%
Eat-OutRestaurantsAmex-Costco True Earnings*3%
TravelTravel AgentAmex-Costco True Earnings2%
CostcoCostco & Costco.comAmex-Costco True Earnings1%
AmazonAmazon.comChase-Amazon Visa3%
All othersN/AChase-Amazon Visa1%

· *Visa will be used at restaurants that do not accept Amex to obtain the standard 1%.




Our choice of credit cards along with switching to Costco Executive membership has enabled us to take in significant rewards over the last several years. It is amazing how much one can save with a little planning on how to use credit cards in an optimized fashion.







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1. Amazon.com Customer Service – Jeff Bezos backtracks on 30-day price guarantee policy!.

Last Updated: 01/2015.

1 comment :

Anonymous said...

Is there a list of restaurants for this Amex/Costco card? We have it and don't know what restaurants acknowledge it! Thanks....Murbelle

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