CIBC Costco Mastercard Unveiled

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The CIBC Costco Mastercard details have been released. It’s better than what Capital One offered, and for a no fee card, it comes with a surprising amount of benefits. That said, I do think a lot of Costco enthusiasts will wish the card came with a few more benefits. 

For those unfamiliar with the situation, earlier this year, CIBC announced that it had signed an agreement to become the exclusive issuer of Costco Mastercards in Canada. This was a welcome change as the Capital One Costco Mastercard was seen as a weak credit card by many Canadians. With the handover expected to happen in March of 2022, we now know what to expect.

CIBC Costco Mastercard benefits

  • No annual fee
  • 3% cash back on restaurant purchases
  • 3% cash back at Costco Gas and 2% at non-Costco gas stations on the first $5,000 spent (1% after)
  • 2% cash back on Costco.ca purchases up to $8,000 (1% after)
  • 1% cash back on all other purchases
  • Mobile device insurance
  • Flexible payment plans through CIBC Pace It

Let’s clear up some confusion right away. Even though you don’t pay an annual fee for the CIBC Costco Mastercard, you still need to have a Costco Membership to sign up. A Gold Star membership costs $60, while an Executive Membership is $120. This may seem odd to some people, but that’s always how Costco credit cards work. 

The most significant new feature is earning 2% cash back on Costco.ca purchases. While that’s great, it’s only up to $8,000 in spending. After you hit that limit, you’ll earn just 1% cash back. In addition, there’s no extra cash back earned in store at Costco. That was the biggest complaint about the old Costco credit card, so it’s a bit surprising to see that CIBC didn’t address that issue.

Another upgrade is the 3% cash back earned at Costco Gas. I love that you get an extra 1% in cash back compared to other gas stations when using this card, but I also wouldn’t go out of my way just for that increased earn rate.

Finally, CIBC is offering flexible payment plans through CIBC Pace It. This is one of those programs that allow you to buy now and pay later at a significantly lower interest compared to regular credit card purchase interest rates. While I admit that the lower interest rate will appeal to some people, it’s unlikely that people get excited about buy now, pay later options.

Cash back will continue to be paid out in January in the form of a gift certificate that can only be used at Costco.

Significant changes to included insurance

Unfortunately, the CIBC Costco Mastercard is seeing a devaluation when it comes to all of the included insurance. You’ll now only get the following:

  • Extended warranty (up to 1 additional year)
  • Purchase protection (90 days)

For reference, the Capital One version gave you up to two years of extended warranty, 120 days of purchase protection, and 60 days of price protection. Seeing the value of your purchase insurance decrease is a huge disappointment. However, this shouldn’t be a huge surprise as the new insurance coverage is pretty much what all credit cards offer these days. The old Capital One Costco credit card had great purchase insurance for some reason.

The price protection, travel accident, baggage delay, and rental car damage that came with the Capital One Costco Card are now gone. CIBC has also included mobile device insurance up to $1,000 to the card. This will be a HUGE disappointment for many people who currently have the Costco credit card. Let’s be real, consumers would rather have better extended warranty and price protection over mobile device insurance.

Is the CIBC Costco Mastercard worth it?

Here’s the thing, if you already have a Capital One Costco Mastercard, you’ll automatically be converted over to the CIBC version. I don’t think any current cardholders will complain about the additional benefits. That said, I suspect some people will consider cancelling their cards as they only held it because it came with really good purchase insurance.

As for those who don’t currently hold the card? I doubt these new changes will make them rush out to get the CIBC Costco Mastercard, but there’s no denying that the new benefits are added incentives.

Remember, this is a no fee card, so it certainly doesn’t hurt to have it. That said, some people may prefer to use a different Mastercard that gives them a higher earn rate at physical Costco stores such as the WestJet World Elite Mastercard or the HSBC World Elite Mastercard.

CIBC Costco Mastercard Unveiled

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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