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Costco picks Visa, Citi

By Jeanine Skowronski · Bankrate.com
Monday, March 2, 2015
Posted: 4 pm ET

Costco has chosen.

The bulk retailer announced Monday that it is teaming with Citigroup and Visa, following the end of its long-term agreement with American Express.

Citi will take over as the exclusive issuer of Costco's co-branded credit card, while Visa will take over as its credit card network beginning April 1, 2016.

American Express and Costco decided in February to end their exclusive contract after failing to come to terms on a renewal agreement.costco-visa-tree

Costco's new agreement, which is subject to Citi's purchase of Costco's existing co-branded credit card portfolio, would vastly widen Costco customers' payment options. Once it goes into effect, you'll be able to use any credit card bearing a Visa logo in its stores.

Details about the new credit card's terms and conditions, including whether existing customers will have to re-apply for the product, will be made available to Costco members in coming months.

American Express, too, is still working out how it will handle the pending transfer of its former partnership, set to expire March 31, 2016. However, the issuer did say it would ensure that its TrueEarnings business and personal Costco credit cards cardholders receive any rewards they have earned with the product.

"Over time, we will be offering them products to continue their relationships with American Express, and we expect to invest to develop and market value propositions that will appeal to those customers," spokeswoman Elizabeth Crosta said in an email.

Would you re-apply for a credit card if a co-branded partnership eliminated your current piece of plastic? Let us know in the comments below.

Follow me on Twitter: @JeanineSko.

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12 Comments
Nate
February 24, 2016 at 2:43 pm

We love Costco! We love the Amex cash back! The customer service is terrific! Citi will really have to up their game! Time will tell. Will the Citi visa have the special rewards? They better have great customer service and extended warranty on purchases. Peace of mind means a lot to know Amex would have your back. We agree with the 55 to xxx crowd. Lower the membership for the young 55 and older group! Thanks for the opportunity to put in our few cents!

MJ
July 26, 2015 at 10:03 am

No, I would not reapply for a co-branded Costco Visa card unless it can offer same or better benefits as the current card that's going away AND it can tranfer similar benefits in a seamless fashion.

That's too bad about AMEX - it offered the BEST customer service, hands down.

mr
June 28, 2015 at 7:46 pm

Not happy at all. I would hate to reapply.

Marion Clegg
March 22, 2015 at 7:55 pm

My husband and I like shopping at Costco even though it is 50 miles away. We don't get in there too often but I do agree with the Senior that thinks there should be a discount for seniors. We don't buy the amount we use to but it seems like we pay the same price. We started going to Costco when it first opened here in the state but it is ashame when they have a good product they stick with it unless it isn't a good seller. We do like the idea of using the Visa card. Hope that has some benefits that come along with it in this day and age.

JohnJB
March 22, 2015 at 6:57 pm

What will become of the Costco AMEX card, that I have now? Will we have to apply for another AMEX card.

Mulligan
March 22, 2015 at 2:44 pm

I, too, am a single senior citizen and paying $55 a year for membership is just too much. At the same time the $55 a year membership also covers a married couple--this isn't fair at all. At the same time, did you know that every time you use your AmEx card the merchant is charged 8% by AmEx???? Think about it. I canceled my AmEx card years ago when I was traveling overseas, particularly in Europe and Asia, because those countries didn't accept AmEx. Reason being? They were charged 8% for every transaction. Glad it's now going to be VISA; however wish they would charge us singles $27.50 for a membership, which makes sense.

Dianne
March 22, 2015 at 1:36 pm

Really will not make any decisions until I see what Citi and American Express has to offer. American Express has offered great benefits and customer service to Citi has big shoes to fill in my opinion.

Sr. Citizen
March 22, 2015 at 1:19 pm

I already have a Visa and my original Costco Gold Star member card plus the current AmEx card. Since I'm a single Sr. Citizen I don't buy a huge amount in bulk every month but I always buy gas there. If new rules make me pay more than the $50/Yr fee I may decide it isn't worth it. I do like shopping there though.

AJ
March 03, 2015 at 4:27 pm

This is great news. I already have several Visa cards with excellent rewards, so I will close my True Earnings card and simply use one of my other cards. That way I'll still get my executive membership cash back and compound on the rewards on my existing Visa cards.

Cosco/Amex fan
March 03, 2015 at 7:02 am

Hope the benefits of this new card will be as great as the Cosco/ Amex card.