Is CIBC’s Takeover of the Costco Mastercard a Complete Fail?

The CIBC Costco Mastercard launched on March 4.

Credit card, online shopping, retail

Image source: Getty Images

On March 4, CIBC finally took over the Costco Mastercard. It was a takeover we were all anticipating, one that was announced way back in 2021. CIBC gave clear instructions on what would happen: users would be automatically rolled into CIBC’s customer base. All they’d have to do is create an account with CIBC (if they didn’t have one already), and they could start earning new benefits on their Costco Mastercard.

Seemed simple enough. Unfortunately, it didn’t go as planned.

For one, CIBC’s takeover blocked some users from accessing their accounts. Others had trouble creating a CIBC account, while still others had accounts but couldn’t see their credit card transactions. And since the takeover happened on a Friday, that meant these users couldn’t get help until Monday morning.

That is if they could get help at all. On Monday morning, CIBC’s phone lines were busy, leaving many users waiting for upward to two hours. On top of that, some were told (after hours of waiting) that their problem was a “technical issue,” and they’d have to wait a little longer for it to be resolved.

Needless to say, the launch of the CIBC Costco Mastercard was far from the excitement of a ribbon-cutting ceremony. That said, let’s not let the beginning spoil what could be a great rewards card for Costco shoppers.

While true, the takeover wasn’t smooth, the CIBC Costco Mastercard isn’t a complete failure. As a recap, here are a few extra benefits that come with this card.

1. Higher base rate

The CIBC Costco Mastercard earns 1% on everyday purchases. This is a step up from the Capital One Costco Mastercard, which earned at a meagre 0.5% for your $3,000.

2. Two new bonus rates

Perhaps the most exciting part of the CIBC Costco Mastercard is the bonus earn rates: 2% back on purchases and 3% back on Costco Gas. On top of that, you’ll also earn 2% back on non-Costco gas and 3% back on restaurant purchases.

The bonus rates do have earnings caps, however. The 2% back on purchases applies for your first $8,000, whereas both gas rates (the 3% and the 2%) apply for a cumulative $5,000 spent. After you reach the cap, your bonus rate falls to 1% for both categories.

3. Mobile insurance coverage

CIBC stepped up big time: as a cardholder, you’ll have up to $1,000 in mobile device insurance, which is fairly high for a credit card with no annual fee.

Your card’s mobile insurance covers your phone if it’s lost, damaged, or stolen. Normally, mobile insurance would cost you around $9 to $20 per month. But if you use your CIBC Costco Mastercard, you’ll get it for free.

Is the CIBC Costco Mastercard for you?

It may have had a rocky start. But if you’re a frequent shopper 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. You’ll get a chance to earn 2% back on online purchases, and your Costco Mastercard functions as your Costco ID.

If you’re not 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. Steven Porrello owns no position in the companies mentioned. 

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