Costco’s New Rewards Card Might Just Be the Best Card to Fight Inflation

With bonus earnings on gas and food, the CIBC Costco Mastercard could help you fight 2022 inflation.

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Well, Canada; it’s official: for the 10th consecutive month, the inflation rate has gone upward, most recently soaring to a whopping 5.1%.

While inflation varies for certain products, it’s hit both food and energy the most. In fact, if you were to take out food and energy out of the equation, we’d be facing a 4.3% inflation rate. That’s still not good, but it’s not as high as 5.1%.

For Canadians who are concerned about inflation, a great solution is to get a cash-back or rewards credit card that earns more for purchased heavily impacted by it. A card that earns more for restaurants and gas is ideal, but where can you find a credit card that earns more for both food and gas?

Actually, it’s fairly easy. And, starting on March 4, Costco might just have the best card to fight inflation: the CIBC Costco Mastercard. Let’s take a look at how this card could help you.

No annual fee

For one, the CIBC Costco Mastercard has no annual fee outside the Costco membership fees. As long as you’re a Costco member, you don’t have to worry about fees eating into your earnings.


If you’re going to fight inflation this year, you definitely need a card that earns more cash back for gas. And with the new Costco rewards card, you get two earn rates on gas purchases.

For one, you’ll earn 3% back whenever you fill up at Costco Gas stations, which is above average for a no-fee rewards card. That’s in addition to the lower gas price you already pay as a Costco member. In addition, you’ll earn 2% back at all other gas stations, which is still good for a card that doesn’t charge an annual fee.

Earning 3% back is super high. But it comes with one caveat: the CIBC Costco Mastercard has a limit to how much you can earn on gas.

You can spend a maximum of $5,000 at your bonus earn rates. That’s $5,000 total, both from gas purchased at Costco Gas and all other gas stations. If you shopped exclusively at Costco Gas, you could earn a maximum of $150 ($5,000 spent). After you’ve spent $5,000, you’ll earn 1% back on gas.

As if earning more for gas wasn’t enough, the CIBC Costco Mastercard will also earn you 2% back on all purchases.

Like the earn rate for gas, however, your 2% back on online purchases caps at $8,000 (or $160 in cash back). After that, your bonus rate drops to 1%. To maximize this rate, buy groceries online and pick them up in store, until you surpass the $8,000 threshold.

To be fair, many cash-back cards earn more than 2% back for groceries. That said, many credit card providers don’t consider Costco a grocery store. So, if you shop frequently at Costco for food, the CIBC Costco Mastercard might be the best card to earn more.


To top of the bonus rates, the CIBC Costco Mastercard allows you to earn 3% back on all restaurant purchases. And the best part? There’s no annual earning cap for this bonus rate. So, no matter how high inflation soars, you’ll always earn 3% back on food purchased at restaurants.

Is the CIBC Costco Mastercard for you?

If you’re already a member at Costco, then yes, this card is absolutely for you. I mean, let’s be real: as long as you have a good credit score, there’s no reason a frequent Costco shopper shouldn’t have a Costco Mastercard. There’s no annual fee, you’ll lucrative earn rates, and your Costco Mastercard functions as your Costco ID.

That said, if you’re unsure about becoming a Costco member, I doubt this card will change your mind. You can easily earn more cash back on Canada’s top cards; not to mention, you can snag a fairly hefty welcome bonus while you’re at 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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