Follow-up on Costco dropping American Express. Costco has announced that it will only accept Visa credit cards at its stores starting April 1, 2016. American Express credit cards will no longer be accepted on that date. Customers can still use Visa and MasterCard debit cards, write checks, or pay in cash. Costco members can also still purchase Costco Cash cards online and then use those gift cards to make warehouse purchases.
Costco has also made a deal with Citi for their co-branded credit card. However, I don’t really understand this paragraph from an AP article:
Costco hasn’t said yet whether people will have to reapply for its rewards credit card. Citigroup says it plans to make the transition from AmEx to the Citi’s Visa card as “seamless” as possible. Costco card holders probably won’t need to reapply, industry experts say. However, a small number of Costco card holders won’t be approved for a Citi card. American Express and Citi have different credit standards and a person who may have qualified under AmEx may not be approved under Citi.
I have never heard of anyone switching over issuers like that. I’ve seen people switch from one American Express flavor to another, or one Citibank flavor to another, but never from and American Express to a Citicard. To me, no reapplication means no new credit check on my report. We’ll have to see.
Based on this comment from someone claiming to be a Costco warehouse manager, my prediction is that the new Citi Costco Visa card will offer a tiered rewards system that offers something like 5% back on gas, 3% back at restaurants, and 1% back on everything else. They won’t do bonus groceries as they already sell that kind of stuff in the warehouse. Basically, slightly better than the old Costco AmEx rewards structure and closer to what Sam’s Club offers.
Costco Switches to Citi and Visa in April 2016 from My Money Blog.
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