Sign In

Your Costco Credit Card is About to Change for the Better

The warehouse store has long had American Express co-branded club cards, but now it's making a switch. We look at how this will affect rewards, and how else you can pay at Costco.
Published

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!


Staff Writer

Julie joined DealNews in 2015, after many years of becoming well-versed in technology issues as a communications professional for a software company. She first entered journalism in college, reporting on issues facing frugal students for CollegeCandy.com. Julie lives in DealNews' hometown of Huntsville, AL.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
You might also like
Leave a comment!

or Register
25 comments
BlueOak
@piewakit, real Americans buy what they want at the price they want to pay. Mucking around with the market screws it up. Did we continue to buy inferior, expensive US-made Zenith, Magnavox, and RCA TVs when SONY came in an blew them out of the water?

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.
Norm_C
You would think in this day & age, they would start accepting as many types of payment as possible. Why don't they start accepting electronic payments like Apple Pay or Pay Pal ? This type of credit card branding agreements will always alienate a segment of customers.

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.
piewakit
For those of you who are worried about supporting large conglomerates that prey on all of us. Why would you change from Costco to anything WALMART owns? You don't even have to have a credit card from a bank you hate. You can pay with cash. You can get a card from a bank you like. I would think that you'd want to support the USA and boycott anything made in China, sold by almost everyone so, do your homework. At least Costco doesn't cheat it's employees like SAM's. BTW, Trump is the problem, not the solution.
DrRadDan
If you don't want the Citi card, Citi states you only need to cancel your existing AmEx card prior to 5/31. The roll out is early June only to valid AmEx accounts. I already cancelled mine.
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.
notcuban
shiv81 link didn't work about costco accepting mastercard or discover...maybe this will?

https://customerservice.costco.com/...il/a_id/719/
BlueOak
Most importantly missed in the above story - comparison to SAMs... Let's be honest - Costco would not have improved their rewards if not for SAMs. We have both.

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.
vad1
I think it may affect one's credit score as the length of time a credit card is opened impacts the score.

A new Citi card will not have the history of an existing AmEx (or any other) card and will ding the credit score, no?
closepuman
actually, not a big deal. Online, costco has been taking any CC for years...it's only been AMEX only IN-STORE.
aylee
I don't have the Costco Amex card. I pay with my debit card. I am excited they will be accepting Visas soon!
mike01001
I am a Costco member and tried to cancel the new card before it is sent to me, but it can't be done. Citi Visa is forcing the card on you and you can cancel once it is sent to you. If you want a good Visa card look at the Penfed cash rewards card. 5% cash back on fuel with no cap and various other perks.
shiv81
According to this page, https://customerservice.costco.com/...-Credit-Card , Costco will only accept Visa, no Mastercard, Discover, or Amex unless it's a debit card.
bellinghop
I've been using an AMEX to collect delta miles at costco. Now that they no longer accept it I'm going to stop shopping there.
jalx
Costco is looking after their bottom line, as we'd expect them to. And they have tried to make the change look attractive to their customers.

Citi Bank treats their customers no better than Centurion Bank (Amex), in my experience Citi is one of the worst.
chadley25
Not sure what was involved in these talks, obviously, but it looks like AMEX's apparent recalcitrance cost them big-time. I can't see any way to look at AMEX's takeaway from this except as a negative. Now none of their cards -- whether co-branded with Costco or not -- will be accepted at all in any Costco stores. That's gotta sting a little.
Youngr1
Not so sure this is right as far as Costco now taking Mastercard in the warehouse. Looks like it's only taking MC online (which I believe is not new).

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.
Bradster
Been a big fan of AmEx for decades. Their customer service is head and shoulders above Visa and MC.

Costco just lost my business, which is just as well as shopping there is only slightly less painful than root canal.
griffin38
The bigger benefit is Costco will take other Credit Cards. I drive a diesel and my local Costco's don't carry it. The details are in the fine print. I have found many stations the benefit doesn't apply. I am just going to use it and see where it works.
dog_man
Oops - I misread Amarei response and agree with @hilander001. All the BP / Shell / Amoco stations I've seen have "stores" where you can purchase other items. Wikipedia defines convenient stores as: "A convenience store is a small retail business that stocks a range of everyday items such as groceries, snack foods, candy, toiletries, soft drinks, tobacco products, magazines and newspapers. Such stores may also offer money order and wire transfer services. In some jurisdictions, corner stores are licensed to sell alcohol, typically beer and wine. They differ from general stores and village shops in that they are not in a rural location and are used as a convenient supplement to larger stores.

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%.
dog_man
I agree with Amarei - read the fine print on the gas rebate you receive - the fine print eliminates virtually every gas station in America , except for the Costco gas stations.

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.
Amarei
@hilander001 I'm not sure where you live but most gas stations are not considered any of those. Wawa might be considered a 'convenience store', but there are other options like BP, Shell, Amoco, etc. But really unless you have a costco gas station, it is not worth it to use your credit card at gas stations. Using credit card is 10 cents more per gallon than paying cash (costco only accepts credit/debit and is at the same price as cash for competing gas stations).
Redbeard
My only concern is Citibank customer service.

I've been very happy with Amex customer service, just hoping Citibank can match it.
hilander001
Not sure what the fine print was for AMEX but for Citi, there are lots of limitations on 4% back on gas. Below is from their site. Between supermarkets, superstores and convenience stores, what else is left? Is RaceTrac or QT considered "convenience store"?

"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

I
wizeazzgurl
Costco takes cash and debit too
Drac
I was a COSTCO member but went away because of AMEX, but, I'm Baaaack...... ;)
GiaHuy
I'm not really a big fan of AmEx, that's why I haven't being a Costco member, but since they're switching to Visa (and accepting other methods of payments), I'm up for it. I've been with Sam's Club for many years already.
Enter to win $2,000