Personal Loans

See Costco’s Financing Options and How They Compare

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The information related to the Costco Anywhere Visa® Card by Citi and Costco Anywhere Visa® Business Card by Citi has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

What started as a small San Diego warehouse business selling supplies at wholesale costs has transformed into one of the top 10 global retailers with over 94 million members worldwide.

As Costco has grown and expanded, so has its product offerings. In addition to selling food, beverages and other household goods in bulk, it has now joined the financial realm and offers Costco financing options to its members. Options include mortgage purchasing and refinancing as well as two Citi credit cards.

In this article, we’ll walk you through available Costco financing and other financing options to consider.

Costco offers financing through Citi credit cards

Costco currently offers three financing options available exclusively to its members:

  • The Mortgage Program for Costco members
  • Costco Anywhere Visa® Card by Citi
  • Costco Anywhere Visa® Business Card by Citi

The Mortgage Program for Costco members has funded nearly 132,000 loans to date and offers Costco financing options for purchasing or refinancing a home. It also offers veterans loans for those who qualify. You can learn more about Costco mortgage services here.

Costco Anywhere Visa® Card by Citi

APR Credit requirement Rewards Annual fee
15.24% (Variable) 720+ subject to credit approval 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases $0 (no annual fee with Costco membership)

If you shop at Costco regularly or use a credit card to pay for your gas, groceries, restaurant spending and travel-related purchases, the Costco Anywhere Visa® Card by Citi is worth considering because of the rewards you’ll earn for every purchase made.

This card is accepted anywhere that takes Visa credit cards, and it doubles as your Costco membership card and offers a variety of perks and rewards. While there is no annual fee attached to the Costco Anywhere Visa® Card by Citi, you must be a Costco member to qualify for this card. Costco membership fees range from $60 to $120 annually, depending on your membership level.

Rewards include:

  • 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases
  • Presale ticket offerings
  • Auto rental insurance options
  • Travel and emergency assistance
  • No foreign transaction fees
  • Extended warranty options on purchases made with credit card

The Costco Anywhere Visa® Card by Citi may be appealing because of its great rewards, but to qualify, you must have an excellent credit score, which may be a deterrent for some people. Also, the 15.24% (Variable) APR on this Costco financing option is above the average APR of 15.13%.

Before applying for the Costco Anywhere Visa® Card by Citi, you may want to research and compare all of your credit card options to ensure you’re getting the best financing option for you.

Costco Anywhere Visa® Business Card by Citi

APR Credit requirement Rewards Annual fee
15.24% (Variable) Very good credit (740+),
subject to credit approval
4% cash back on eligible gas*, 3% on eligible restaurants & travel, 2% at Costco & Costco.com, and 1% on all other purchases $0 (no annual fee with Costco membership)

Whether you’re looking to extend and expand your business and need a line of credit, or you’re looking to earn rewards on your monthly business expenditures, a business-specific credit card could be a good financing option to consider. Costco financing options include the Costco Anywhere Visa® Business Card by Citi.

Like the Costco Anywhere Visa® Card by Citi, this business credit card has a variety of cashback rewards for all purchases and does not have an annual fee, except for the Costco Business membership fee of at least $60. If you shop at Costco Business Center for your business-related purchases, then this card is definitely worth considering because of the abundant rewards you’ll get from your everyday purchases.

Reward highlights for businesses:

  • 4% cash back on eligible gas*, 3% on eligible restaurants & travel, 2% at Costco & Costco.com, and 1% on all other purchases
  • Presale ticket offerings
  • Auto rental insurance options
  • Travel and emergency assistance
  • No foreign transaction fees
  • Extended warranty options on purchases made with credit card

Keep in mind that because this is a business credit card, it can only be used for business/commercial purposes. If you’re considering opening a business credit card, compare all of your options before making a decision.

Alternatives to Costco’s financing options

Personal loan

A personal loan, also known as a signature loan, is a financing option that could be used for a wide variety of purposes and that does not require collateral to back it. If the borrower fails to pay, they will not lose their personal property.

For people with good to excellent credit scores, personal loans may be a great alternative to Costco financing options because the interest rates will likely be lower compared with a credit card. For example, if you have a credit score between 680 and 719, the average APR on a personal loan is 11.12% as of the date of publishing. If your credit score is 720 or higher, you could get a personal loan with an average APR as low as 2.49%.

Compare those numbers with the average APR of 15.24% (Variable) on the Costco Anywhere Visa® Card by Citi, and you’ll see that a personal loan is worth considering. However, if you have poor credit, personal loan interest rates could be as high as 136.50%.

Low-interest credit card

Costco financing options include a personal credit card and a business credit card. While both offer great rewards, they both have a slightly above-average APR and are not the only credit card options available.

An alternative financing option to consider is a low-interest credit card. According to CompareCards.com, a LendingTree company, the minimum APR on a low-interest credit card can be as low as 13.36%, with an average APR closer to 17.90%. However, you typically need a good credit score to qualify for lower APR offers.

While the average APR for a lower-interest credit card is competitive with the two Costco financing options, it’s worth considering all of your low-interest options in case you may qualify for a credit card with a better rate. You’ll want to compare and contrast the benefits associated with each credit card to see which option is best for you.

Paycheck advance

Money can be tight in the days leading up to payday. You may have enough money coming in your next paycheck to cover your expenses but often bills are due before payday. In situations like these, people may face overdraft fees because they don’t have enough money in their account to cover their bills.

If you need money in the days before payroll lands, you could consider asking your employer or HR department for a paycheck advance to avoid unnecessary bank fees. Some companies will oblige and give you a cash advance on your paycheck so you can make all of your payments on time. You may also consider apps like Earnin or Dave that aim to help people who need a short-term cash advance while they wait for the next payday.

If you’re using your paycheck advance to help pay for groceries and gas, then the Costco credit card may be worth considering instead because you’ll earn rewards on purchases you’d be making anyway. However, if you need a short-term loan and either do not want to open another credit card or cannot qualify for another credit card, then a paycheck advance may be a better option than a Costco financing option.

Payday loan or payday alternative loan

Payday loans are characterized as short-term loans that give borrowers quick cash and must be paid back in full. Unlike a personal loan, secured loan or credit card, where payments may be spaced out over a period of time, payday loans are due in a single lump sum by the due date. Usually, payday loans charge a high interest rate, ranging from 154% to as high as 677%.

If you’re in need of a cash advance quickly, then you may be considering a payday loan, title loan or pawn shop loan. These types of fast cash loans appeal to people who have poor credit and may not qualify for a personal loan or a Costco financing option. While almost anyone can take out a payday loan, it’s important to know that these types of loans have high interest rates that can cost the borrower more in the long run and push them into a cycle of debt.

What about a secured loan?

A secured loan is a type of loan backed by collateral. Collateral is something like your home, car or property that can be liened or seized should you default on the loan. Secured loans usually have lower interest rates compared with credit cards or unsecured personal loans. However, you have more on the line, as you could lose your collateral if you do not make your payments.

When considering secured loans versus Costco financing options, you’ll need to consider the pros and cons of each. If you’re thinking about obtaining a secured loan to finance a purchase at Costco, ask yourself if it’s worth the collateral you’re putting up to secure the loan. If it’s not, then Costco financing is likely the better choice in this case because you do not have to put up collateral to qualify for the Costco Anywhere Visa® Card by Citi.

You have plenty of choices when it comes to loans and financing options. Costco financing options may appeal to people who frequently shop at Costco because of the great rewards, but keep in mind that there are plenty of alternative options to help finance everyday purchases as well as larger expenses.

 

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