What’s the Maximum You Can Earn Using the CIBC Costco Mastercard?

The CIBC Costco Mastercard has lucrative earn potential. But there are some annual caps you should be aware of.

consider the options

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We’re now just two months away from the official launch of the CIBC Costco Mastercard. And, from the looks of it, the CIBC Costco Mastercard has the potential to earn more cash back than its old Capital One counterpart.

Yet, unlike the Capital One Costco Mastercard, which had unlimited earn potential, the CIBC version comes with one major limitation: the bonus rates come with earnings caps. If that concerns you, don’t worry. The caps are high enough to allow you to earn a significant amount of money.

What’s the maximum you can earn on the CIBC Costco Mastercard? Let’s take a closer look.

How much can you earn on gas?

The CIBC Costco Mastercard has a fairly high earn rate for gas purchases. You’ll earn 3% back on Costco Gas and 2% everywhere else. The cap, however, is set at $5,000 spent. When you charge $5,000 of gas to your Costco card, whether that’s from Costco Gas or anywhere else, your card will start earning only 1% back. The bonus earn rates recharge every year.

So, much can you earn on gas? Well, that depends on where you shop for gas. If you only shopped at Costco, you could earn a maximum of $150 per year. Conversely, if you used your Costco card to buy gas at non-Costco gas stations, you could earn a maximum of $100. For those who shop at both Costco Gas and other gas stations, your maximum earning will be between $100 and $150.

What about at Costco.ca?

This one is simple to understand: your CIBC Costco Mastercard comes with a 2% bonus earn rate for Costco.ca purchases. This earn rate will max out at $8,000 spent, which is $160 in cash back. After that, your card will earn 1% back.  

What’s the maximum you can earn on your CIBC Costco Mastercard?

Even though the Costco rewards card has caps on gas and Costco.ca purchases, it does not have an overall earnings cap (phew, right?) Once you’ve maxed out your bonus earn rates, your card will earn 1% for every purchase (aside from restaurants, which have no annual cap and earn 3% back). But at no point will your Costco card stop earning 1% back.

One trick to earn double your rewards

If the maximum earnings on the CIBC Costco Mastercard disappoint you, you do have one option to earn more: get a Gold Star Executive Costco Membership.

The Gold Star Executive membership is a step up from the Gold Star membership. It costs an additional $60 per year (for a total of $120), but with it you can earn 2% on purchases made in Costco as well as on Costco.ca. The Gold Star Executive membership has an annual cap of $1,000 cash back (or $50,000 earned). If we factor out the $120 membership fee, that’s a potential of $880 per year, simply for shopping at Costco.

Right now, you can double-dip your Capital One Costco Mastercard with your Gold Star Executive membership. Though neither Costco nor CIBC has said directly that you can double-dip with the new CIBC Costco Mastercard, I don’t see why you couldn’t.

If you can, you have the potential to earn 4% cash back on purchased made online (2% back on your membership card and 2% back on your rewards card) as well as 3% back in stores. If we factor in the annual caps on your rewards card, you could earn upwards of $1,190 per year.

Should you get the new CIBC Costco Mastercard?

If you’re a frequent shopper at Costco, then the answer is obvious: yes, you should absolutely get this card. Likewise, if you spend over $3,000 per year at Costco, upgrading your membership to Gold Star Executive would be a smart idea ($3,000 is $60 cash back, which makes up the difference between a basic membership and the Executive one).

But for those that don’t shop at Costco, I wouldn’t waste your time. Canada has plenty of great rewards and cash-back cards to choose from, ones that will earn you more in the long run.

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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