Your Costco Credit Card is About to Change for the Better
Last year, negotiations between Costco and American Express ended without reaching an agreement for the two companies to continue a partnership. Instead Costco announced that beginning this year, American Express cards would no longer be the co-branded card of the wholesale giant. The new store card will be a Visa from Citi, and the official switch will happen in June. Before that occurs, here's some of the more important things to know.
Citi Visa Has Better Rewards Than American Express
The American Express card provided some pretty decent rewards for Costco shoppers, and was probably one of the easiest cash-back AmEx cards to qualify for. Members could earn 3% back on gas purchases at Costco and other gas stations (up to $4,000 spent per year), plus 2% back on qualifying travel and restaurants. The biggest question when members found out a change was coming was how the new rewards would compare.
It turns out, they can't compare — the Citi Visa has significantly better rewards. When the switch occurs, members will be able to earn 4% back on gas purchases for a limit of up to $7,000 per year. Plus they'll earn 3% back for most restaurants and travel purchases, 2% back at Costco stores and online at Costco.com, and then 1% back on everything else.
SEE ALSO: 6 of the Best Credit Cards for Cashback
You Don't Have to Re-Apply for the New Card
If you're already a Costco member, and you have the American Express card from Costco, you aren't going to have to re-apply for the new Citi Visa. Your AmEx account will simply be moved over to Visa. Citi also won't pull credit reports during the switch, so your credit shouldn't be dinged for the move.
Obviously, if you aren't a Costco member, or if you don't currently have the American Express card, applying for the new Visa will be like any other credit card application.
New Cards to Be Mailed in May
Costco members will receive their new Citi Visa cards sometime during May. American Express cards can be used through June 19. Costco will begin accepting the new Visa, as well as other new payment options, on June 20.
Keep Your Earned Costco Rewards
Any cash back rewards members have earned with their AmEx cards won't just go away. Until June 20, they'll accumulate rewards like normal when they use their cards. Then when the transfer goes through, the rewards will move over to the Visa card, along with any outstanding balances. The only thing members will lose is any additional benefits exclusive to American Express.
SEE ALSO: When Is it Worth Paying for a Rewards Credit Card?
Don't Forget to Change Information for Recurring Payments
If you prefer to make automatic payments or withdrawals to pay certain bills, don't forget that you'll need to change that information when you receive your new Visa. The American Express card number will no longer be valid, so take note of your new credit card number. Make those changes accordingly so you aren't hit with any surprise late fees or extra charges from a company trying to take payments from a defunct card.
Costco Will Accept Pretty Much Any Payment EXCEPT American Express
Even if you aren't crazy about the new card being a Visa, Costco still has you covered. It will begin taking practically any payment you can think of, including any Visa credit card (whether it's a Costco one or not), plus debit/ATM cards, Costco cash cards, and of course, Costco credit cards. As long as you have something other than American Express in your wallet, you're set to shop.
Readers, does this change make you interested in a Costco card? Current cardmembers, are you excited about the new Visa, or will you miss your American Express? Or are you more of a Sam's Club shopper? Sound off in the comments below!
I'm not a fan of Walmart, but not due to internal practices - I simply detest their crappy stores.
Walmart (SAMs) does not "cheat" their employees. They simply have a different business model vs. Costco. One is high pay, high level of service, the other is low pay, low level of service.
If SAMs were to pay Costco level wages, guess who would be out of a job? Those lower skilled, less experienced existing SAMs employees. If SAMs employees feel they are being "cheated", they are free to go elsewhere.
The market wins 10 times out of 10, eventually, and in spite of attempts to force it into contortions favoring special interests at the expense of everyone else. Special interests might be unions or crony-corporate relationships.
For me, AMEX is the only credit card I've owned for years. It forces me to think about what I buy because I know I have to pay off the balance when the bill comes. If I continue to shop at Costco, I'll either have to pay cash or use a debit card. Oh well, like most retailers, we're at their mercy with only the choice of shopping somewhere else.
My bigger problem is that, as much as my family likes Costco, the are SO FAR away. I visit Costco when I have returned from an airline flight. Luckily, I travel about every six weeks. Their nearest store WAS five miles from the airport. Costco closed that one and moved it 5 miles farther away. That puts the store 80 miles from my house. We have a BJs 4 miles away and Sams Club 5 miles away, with alternates at the other end of the county, 25 miles away. We think Costco is netter, and many of my coworkers and neighbors reluctantly also make the LONG journey to Costco. But we can't convince them there is a need for a store, near the Space Coast.
https://customerservice.costco.com/...il/a_id/719/
SAMs MasterCard: 5/3/1% gas/restaurant & travel/everywhere else.
Costco Citi Visa: 4/3/2/1% gas/restaurant & travel/Costco/everywhere else.
SAMs bankcard customer support and their bank's online site are HORRIBLE. Not a fan of Citi either. Amex has excellent customer service.
Bottom line: if you buy a lot of gas and not as much in warehouse, the SAMs card still matches up nicely.
BTW, Costco has superior customer service, but we detest the way they hook you on a food product and then dump it. We've gravitated to buying more of our routine stuff at SAMs. And we buy all our gas there. Infrequent buy, non-food product stuff tends to be higher quality at Costco.
A new Citi card will not have the history of an existing AmEx (or any other) card and will ding the credit score, no?
Citi Bank treats their customers no better than Centurion Bank (Amex), in my experience Citi is one of the worst.
From the Costco home page: . Beginning June 20, Costco will accept only the following: Costco warehouses- all Visa cards, cash, checks, debit/ATM cards, EBT and Costco Cash Cards. Costco.com- all Visa cards, MasterCard, Discover, debit/ATM cards and Costco Cash Cards.
Costco just lost my business, which is just as well as shopping there is only slightly less painful than root canal.
A convenience store may be part of a gas/petrol station".
I guess I'll have to try the Shell station in my area and see what % rebate I get. I'll bet it's 1%.
I also don't live near a Costco warehouse / gas station - so this rebate is worthless to me! Almost all the gas stations in my area charge the same price for cash or credit. Safeway tried to use the $.10/ gallon more for credit cards, but that only lasted about 6 months. Now Safeway is charging the same price per gallon for credit or cash.
I've been very happy with Amex customer service, just hoping Citibank can match it.
"4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year in gas purchases and then 1% thereafter.
Certain Non-Qualifying Purchases.You will only earn 1% cash back, not 4%, for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco or for fuel used for non-automobile purposes."
more at
https://www.citi.com/...iti.action?ID=costco-terms
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