How to Earn Double the Rewards on the CIBC Costco Mastercard

With a Gold Star Executive Costco membership, you earn 2%. Stack that with a Costco Mastercard, and you’ll earn even more.

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After nearly three months, CIBC and Costco have finally announced the perks on their new cobranded Mastercard. And, from the looks of it, the CIBC Costco Mastercard looks fairly good compared to its old Capital One counterpart.

For one, cardholders will earn 3% cash back at Costco Gas (up to $5,000 spent) and 2% back at Costco.ca (up to $8,000). The base rate is 1%, which is better than the old 0.5% starting rate of the Capital One card, and you’ll still earn 3% at restaurants.

But, of course, if there’s one disappointment on this card, it’s the lack of a bonus earn rate for purchases made in Costco warehouses. That said, there is a way for Costco members to earn more than the 1% on purchases made in-store. How does that work? Easy — get a Gold Star Executive Costco Membership.

What’s a Gold Star Executive Costco Membership?

Costco’s personal membership program has two tiers: the Gold Star membership and the Executive membership.

The Gold Star membership is your typical run-of-the-mill program: you pay $60, and you can shop at Costco warehouses.

The Executive membership is a step up: for an additional $60 (for a total of $120), you can shop at Costco warehouses and earn 2% back on purchases made in Costco as well as through Costco.ca. Every year, you can earn up to $1,000 back (or $50,000 spent). For a mere $120, that’s a fairly good deal, especially if you shop frequently at Costco.

Can you double-dip with your Costco Mastercard?

Right now, you can double-dip with your Capital One Costco Mastercard. That means, if your card is currently earning 1% back (that is, you’ve spent over $3,000 and upgraded from the 0.5% base rate), you could earn 1% on your Capital One card and 2% on your Executive membership.

To date, neither Costco nor CIBC has said directly that you can double-dip with the new CIBC Costco Mastercard. But if you can, the rewards will be explosive.

Just consider this: if you shop at Costco.ca with an Executive membership, you’re already earning 2% back on your purchases. Put those same purchases on your CIBC Costco Mastercard, and you could earn 4% back on purchases made online.

For those made in-store, you’ll earn 1% on the CIBC Costco Mastercard and 2% on your Executive membership, for a total of 3% back. That’s enough to keep up with some of Canada’s top cash-back cards, especially those designed specifically for food purchases.

Should you get the Gold Star Executive Costco Membership?

If you shop frequently at Costco, you’re probably a good candidate for the Gold Star Executive membership.

To know for sure, however, you’ll have to do the math. If you currently have a Costco membership, then you’ll pay $60 to upgrade to the Executive. With the 2% cash back on this membership, you’d have to spend $3,000 to cover that extra $60. If you think you can spend $3,000, then the membership would pay for the difference.

If you wanted to cover the entire $120 membership, you’d have to spend $6,000. That would give you a $120 cash-back voucher, essentially giving you a Costco membership for free.

So, yes, if you’re a frequent shopper at Costco, you can earn big with a Gold Star Executive Costco Membership. Combine that with the CIBC Costco Mastercard, and you can earn more for in-store purchases, even if the credit card doesn’t have a bonus rate built into it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Mastercard. Fool contributor Steven Porrello has no position in the companies mentioned.

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