Can You Use A Credit Card At Costco?

Last Updated on 09/07/2020 by GS Staff

Q: Can you use a credit card at Costco?

Buying groceries and other goods in bulk at Costco can be cost-effective. However, it is really easy to walk out of the store in disbelief about how much you just spent. My wife has a habit of immediately running her finger down the receipt thinking there must have been some kind of mistake by the cashier. I always tell her to just wait until we get home a try to find a place to put all this stuff.

Anyway, Costco realizes that people spend a lot of money at their stores. They want customers coming back so they allow various payment methods. One payment method allowed by Costco is a credit card. However, not all credit cards are accepted by the company.

Costco accepts the following payments:

  • Visa credit cards
  • Costco credit cards,
  • Cash
  • Checks
  • Debit or ATM cards
  • Costco Shop Cards
  • EBT

Cash, check, and EBT cannot be used for payment on, Costco Gas Stations, or Costco Car Washes. 

While Costco accepts a variety of payments, they do not accept MasterCard, Discover, or American Express. Costco moved to exclusively only allowing Visa after somewhat recently ending a 16-year exclusive relationship with American Express.

Costco’s switch to Visa was a cost-saving measure. Every time a card gets swiped the company pays a transaction fee. Since Costco is so powerful, it was able to negotiate better per swipe fees from Visa compared to the previous American Express fee agreement. Visa benefits because their exclusive deal with Costco eliminates swipes from the competition at the stores.

In theory, customers should also benefit from lower or stable prices. We shall see. However, the Visa deal does open the door to many more customers who hold Visa cards. Visa has a substantially larger share of the number of credit cards in circulation than American Express.

Image: Mike Mozart