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Costco's new credit card has some of the best rewards in the market

Jun 21, 2016, 21:50 IST

Paul Sakuma/AP Images

Costco launched a new credit card this week that offers some of the best rewards in the market.

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The new card, managed by Visa, launched on Monday. Costco's former card was managed by American Express.

The company ended a 16-year deal with American Express to switch over to Visa.

The new Costco Visa card offers 4% cash back on eligible gas purchases (on up to $7,000 per year, then 1% back), 3% back on restaurant and travel purchases, 2% back on Costco and Costco.com purchases, and 1% back everywhere else.

That's a much better deal than the American Express card, which offered 3% cash back on gas (up to $4,000), 2% back on restaurants and travel, and 1% back everywhere else, Fortune reports.

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In fact, the new Visa card offers some of the best rewards of any card in the market, according to Sean McQuay, a credit-card expert for financial website NerdWallet.

McQuay told the Chicago Tribune that the Visa card offers the best cash-back rates on gas, restaurants, and travel.

There is no annual fee on the Visa card, but shoppers must pay for a $55 annual Costco membership to use it.

The Sam's Club MasterCard, by comparison, offers 5% cash back on fuel purchases (on up to $6,000 per year, then 1% back), 3% back on restaurant and travel purchases, and 1% cash back on other purchases. Customers can earn a maximum of $5,000 in cash-back rewards annually.

NOW WATCH: We tried the Costco food court and it totally blew us away

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