Bad news for Costco fans: one of the most beloved perks of the Costco credit card will soon be going away. Credit card companies often offer their customers exclusive benefits like cash back and discounts to stand out from the competition. But nothing good can last forever—especially in times of economic instability like these. Keep reading to learn how your Costco credit card benefits are changing and what you can do instead.
Say goodbye to this Costco credit card perk
In a partnership with Citi Bank, Costco offers two types of credit cards: the Costco Anywhere Visa Card and the Costco Anywhere Business Visa Card. Both offer benefits like no annual fees for Costco members and cash back on gas and Costco purchases. But one of the most unique Costco credit card benefits is the free extended warranty protection, offering 24 additional months of coverage on purchases up to a seven-year limit. Or, at least, it used to be.
As many investigative Reddit users have discovered, this perk is slated to end for both cards on January 22, 2023. All qualifying Costco purchases made before the end date will still be covered by the warranty, and the warranty will still stand for past purchases that are currently covered. But anything you buy after January 22nd will no longer qualify for the additional protection.
What prompted this seemingly sudden change? In a notice from Citi Bank, the company explained, “We are making these changes so that we can continue providing the key benefits that our customers use and value most at no additional cost.” While this explanation is a bit vague, it seems likely they’re ending this benefit due to budgetary setbacks caused by inflation and other economic stressors.
This isn’t the first time Citi Bank has removed credit card benefits. In 2019, the creditor cut a lot of benefits from its cards, including extended warranty and purchase protection. The Costco credit card was originally spared from this perk purge, but unfortunately, that won’t be the case for much longer.
Getting an extended warranty for no extra cost is a great credit card perk; it makes repairs simple and provides consumers with essential peace of mind. But when you’re paying for a warranty out of pocket, is it really worth it? In truth, it depends on the cost of the item, how complex it is to repair, and the fine print of the coverage.
The cost of an extended warranty can vary greatly depending on the product and store. In general, experts recommend avoiding warranties that cost more than 30% of the total price of the item you’re buying.
Often, it may be better to skip the extended warranty altogether. According to Consumer Reports, stores keep 50% or more of what they charge for extended warranties. They also found that repairs are often covered by manufacturer’s warranties and often, the costs of repairs aren’t much higher than the price of the service plan.
Soon, Costco credit cardholders will no longer receive free extended warranties on their qualifying purchases. The change to the Costco credit card perks may come as a surprise to many consumers. But there’s still time to take advantage of this benefit before it disappears. So, if you’re planning to buy any large electronics or appliances from Costco, be sure to do so before January 23rd. Otherwise, it may be best to forgo the extended warranty altogether.