How To Use Your Non-Amex Rewards Card At Costco

One of the best things about the MBNA Smart Cash MasterCard is getting 2% cash back on your grocery and gas purchases – up to $400 a month.  We spend between $700 and $1,000 a month on groceries and gas, so we should be able to easily max out this rewards multiplier.

The problem is that we do a lot of our grocery shopping at Costco – up to $400 a month – and they only accept American Express credit cards.  I was using an American Express Air Miles credit card at Costco, which gets me 1 Air Mile for every $15 spent.  The rate of return for Air Miles rewards is only 0.73%, compared to getting 2% back with the Smart Cash card.

I looked into the TrueEarnings Card from Costco and American Express, but I’d only earn 0.25% on the first $1,000 in spending, 0.50% on the next $2,000, and then 1% on any amount over $3,000.

My Semi-Failed Attempt To Use A Non-Amex Rewards Card At Costco

When I looked at my rewards statement from MBNA, I noticed that I was getting credited 2% for purchases at Wal-Mart and Superstore, even though we didn’t actually buy groceries.  It seems like certain retailers are classified as grocery stores, no matter what you purchase from them.

This gave me an idea for a work-around to my Costco problem.  I could try and get 2% cash back by purchasing Costco cash cards online with my Smart Cash card.  So, last week I bought $400 worth of Costco cash cards from their website using my Smart Cash card.  That worked, no problem.

Then I checked my rewards statement to see how MBNA would code this purchase.  A couple of days later, I see the transaction appear in the rewards statement:

This is a good screen shot to show you how MBNA classifies grocery spending.  Unfortunately the Costco cash cards were not coded as a grocery purchase, so I only received 1% cash back.  Shoppers Drug Mart (SDM) also does not qualify as grocery spending, but Wal-Mart does qualify*.

*You’ll notice the rewards for my Wal-Mart purchase is at 5%, not 2%.  This is because I’ve been upgraded to the MBNA Smart Cash World MasterCard and get another 6 month period with 5% cash back on grocery and gas purchases.

What Did I Learn From This?

While I wasn’t successful getting a full 2% rebate for my Costco purchases, I was still able to use my Smart Cash card at Costco by purchasing cash cards online and earn 1% cash back instead of 0.73% from using my American Express Air Miles Credit Card.

This was the most unusual way I’ve tried to boost my rewards card earnings.  The small increase in rewards is probably not worth the effort for me in this case, but it does make sense for people who:

  • Do the majority of their grocery shopping at Costco and want to earn more rewards
  • Have a non-Amex rewards credit card and receive bonus points for increased spending (like the Capital One Aspire World Cash MasterCard, for example)

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