Credit Card, Debit Card, or Cash: What's the Best Way to Pay for Costco Purchases?

Shopping at Costco often means getting to save money on the purchases you're making, whether it's groceries, household supplies, electronics, or apparel. But when it comes to paying for those purchases, you have choices.

Costco allows you to pay for the items you're buying using cash, a debit card, or a credit card. However, the only type of credit card accepted at Costco is Visa, so if you don't have a Visa card, you'll need to either apply for one or use cash or a debit card.

It's generally a good idea to pay for Costco purchases with a credit card so you can score cash back or reward points on the items you're buying. But there's an exception to that suggestion.

When it makes sense to use a credit card

Some Costco members use the Costco Anywhere Visa® Card by Citi to pay for their purchases. With this card, you get 2% back on all Costco purchases, not to mention 4% back on gas fill-ups and EV charging (up to $7,000 per year; 1% thereafter), and 3% back on restaurant and travel purchases. Plus, this card can actually double as your Costco membership card.

Also, you should know that if you have a Costco executive membership, which gives you 2% back on all Costco purchases, you can double up with your Costco Anywhere Visa® Card by Citi to score 4% back on Costco purchases.

But you don't need the Costco Anywhere Visa® Card by Citi to pay for Costco purchases with a credit card. Any Visa card is accepted there, so if you have one that offers a rewards program that's generous, it could pay to use it. That way, you can earn points or cash back on the items you're buying.

When it pays to skip the credit card at Costco

While it generally pays to use a credit card at Costco, there's an exception, and that's when you're already grappling with credit card debt. If that's the case, you probably don't want to add to your existing balance(s) and dig yourself further into a hole. So if you're trying to get out of credit card debt, it could be a better idea to pay for Costco purchases with cash, or use a debit card that's linked to your checking account.

If you don't have a debit card, or you lost yours, you can also write a check to pay for your Costco purchases. But if you go this route, make sure to keep a record of it so you're not caught off guard when that amount is debited from your account.

You can also mix and match

You don't have to commit to a single payment method when it comes to Costco purchases. During months when your credit card balance is manageable, you can use a credit card to earn points or cash back. If you've landed in debt, you can fall back on cash or debit card payments temporarily until your situation changes. You could even decide to pay for Costco purchases with cash one week, credit card the next week, and so forth, depending on what makes the most sense for you.