Costco Canada Ditches American Express for Capital One MasterCard

September 24th, 2014 · 23 Comments

In some amazing news, Costco Canada will no longer be accepting American Express cards as of January 1, 2015, either in store or on the website.  The two companies have decided after fifteen years and a co-branded card to part company when their current agreement expires on December 31, 2014.  I was really shocked when I heard about this.

Apparently, the separation comes about from tough negotiations during their latest contract renewal and they just weren’t able to come to an agreement.  Neither side is commenting on what caused the breakdown in the relationship.  However, if I had to guess, I would say that Costco wanted a more favourable transaction fee; the fee they pay to American Express when someone uses their card for a purchase at Costco.  Since that is where American Express makes their money, it seems likely that is where Costco wanted something different, as in a much smaller percentage than American Express feels they deserve/want/need.

As I’m sure you all know, American Express is the only credit card accepted at Costco Canada (and most other Costco locations around the world).  This kind of exclusive relationship with a retailer is really rare but was a great way for American Express to build up their membership with a certain type of consumer in Canada.  I am certain this was a very lucrative arrangement for American Express, though all they will say is that the Costco relationship was a “sizeable portion of their portfolio” in Canada.   I would imagine that the loss of a chunk of Costco Canada’s $17.2 billion in revenue (for 2013) will be a big hit to American Express operations in Canada.  Not to mention, the only reason a lot of Costco members have an American Express is because of the co-branded card with Costco.  If that is no longer an option, a lot of Costco members will get rid of their American Express in favour of using an existing MasterCard or signing up for the new co-branded Capital One MasterCard.  This could really snowball into a nasty loss for American Express in Canada.

So, the big question: who will be the new credit card partner for Costco Canada?  And the lucky winner is…..Capital One MasterCard.  Apparently, MasterCard in general will be accepted at Costco Canada, according to a statement from MasterCard.  I am sure that the acceptance of MasterCard at Costco Canada locations will make a lot of people very happy, since it is one of the mainstream credit cards that is already in a lot of wallets.  I imagine this is a big win for Capital One too as they look to grow their business in Canada even more.  And, I am sure, that they are looking to translate this in to a similar relationship with Costco US too.  Exact terms and types of cards that will be available as part of the new Costco Canada and Capital One relationship haven’t been released yet, but I imagine that will be coming along in the next month or so.

I am sure that everyone has a lot of questions about what this means for their existing American Express TrueEarnings and Platinum Cash Rebate cards that were co-branded with Costco.  Helpfully, Costco Canada has created a page where they address the most likely questions about what happens now if you’ve been using an American Express to shop at Costco Canada.  I’ll try to summarize it for everyone:

  • If your current Costco membership card is on the flip side of your co-branded American Express card, you can still use it as your membership card even after the end of 2014, you just can’t use it as a credit card anymore.  Your membership will not be affected by the changes to the credit card situation at Costco.
  • If your Costco membership renewal is billed directly to your American Express card, Costco will send you a renewal notice in the mail (the old fashioned way) if your membership is up for renewal in November 2014 or later.
  • Right up until the end of the year, December 31, 204, you will still be able to use an American Express card to shop at Costco Canada locations or at  However, as of January 1, 2015 American Express will no longer be accepted at Costco Canada or
  • As of January 1, 2015 you will no longer be able to use your co-branded American Express TrueEarnings or Platinum Cash Rebate card for purchases at any merchant.  Basically, these cards will cease to function at the end of 2014 as anything but an emergency ice scraper.
  • If you accept a replacement card from American Express prior to the end of 2014 you will no longer be able to use your TrueEarnings or Platinum Cash Rebate card for purchases or to earn rewards. [This seems obvious to everyone I’m sure.]
  • If you currently have a TrueEarnings or Platinum Cash Rebate card you can continue to use it to accrue rewards until the end of 2014.
  • Costco US will continue to accept American Express as there is no change to their credit card agreement.  However, as with all other merchants and Costco Canada, Costco US will not accept TrueEarnings or Platinum Cash Rebate cards issued in Canada after the end of 2014.
  • Pretty much at the end of 2014 your Costco Canada American Express co-branded TrueEarnings and/or Platinum Cash Rebate cards are useless since they will not be accepted anywhere as a credit card.
  • For all of the details, read the full FAQ at Costco Canada.

I know a lot of people are very displeased with the co-branded American Express cards, especially how they do their end of year rewards check, so I imagine a lot of people see the end of this relationship as a positive thing.  I hope that the new cards with Capital One are even better than the rewards offered with the American Express, and that they have better customer service.   As soon as I hear anything about the new Costco and Capital One MasterCard cards, I will be sure to share it with everyone here.

For more information:


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23 Responses so far ↓

  1. 1 Edward Mason // 2015.03.25 at 4:48 pm

    I have been with Capital One for along time.With Capital one savings account I
    Can transfer funds to and from a credit union and another bank without charge.
    I can also buy an sell on the NYSE for only $6.95 per transaction
    I have never had any problems with Capital One.

  2. 2 Therese Paquette // 2014.12.18 at 4:55 pm

    Costco Canada should by law advise the new card owners that the Capital One card CANNOT be used at Costco U.S. stores. This really sucks especially for the snowbirds. I am sure lf they told the members who are applying for the card they would not get the the card. They would apply for the regular American Express card,which is what I am doing. HOLDING that information from the MEMBERS is not honest. I no longer trust Costco.

    • 3 Kimberly // 2014.12.19 at 4:14 am

      @Therese – Costco Canada has a different payment system than Costco US; they are in no way related. The new Capital One MasterCard will be valid anywhere that a MasterCard is accepted, unfortunately, that does not include Costco US locations at this time. Costco was not trying to mislead anyone, you can only use the cards that they accept at their locations, wherever that may be in the world.

  3. 4 Jimmy // 2014.10.26 at 2:55 am

    Thank you.

  4. 5 Len // 2014.10.24 at 4:05 pm

    One more thing. Right now I am unable to download the Capital One Mastercard Costco transactions into Quicken 2012 Home and Business. Capital one referred me to Quicken and I have yet to get a resolution. Its no big deal but my Amex account downloaded easily – so there are pros and cons, but I am sure this will be resolved eventually.

    • 6 Alexandre // 2014.11.30 at 10:55 pm

      This worked for me with my Quicken 2014 and Costco’s new Mastercard statement data:

      1. save statement as a Quicken pre-2003 QIF file in your browser’s downloads folder
      2. set up in Quicken an account you will use for Capital One Mastercard
      3. select from the account list your CapitalOne Costco account in Quicken.
      4. In Quicken go to “File”->”File Import”->”QIF File…” , browse to the file you downloaded from the Capital One statement page, and… it worked for me. Transactions got sucked into Quicken.. Hope this helps.

      • 7 Len Kolpak // 2014.12.19 at 9:27 am

        Thanks for the advice. I did what you suggested and it worked for me.

  5. 8 Len // 2014.10.24 at 3:59 pm

    I do a lot of shopping in the US and found the Amex card is NOT taken in a lot of US businesses, however its always nice to get the cheaper gas at US Costcos and simply put it on the Amex Card. Will their gas stations take the new Canadian Costco Capital one Mastercard as Costco membership card. If so, I will simply pay with Canadian debit cards which I know they take.
    In this case there will be no need for the Amex card.

  6. 9 Alex // 2014.10.17 at 7:27 pm

    I’m *very* familiar with the whole Amex being replaced by Capital One Mastercard deal.

    Costco Canada has already started accepting all MasterCards, for about 3 weeks now. The Platinum Costco-branded MasterCard carries the same rewards as the Amex (at least in Canada) – 3% on restaurants, 2% on gas (at any gas station that takes MC, so all of them) and up to 1% on everything else, including Costco purchases, on top of the 2% Executive Membership check.

    As a sweetener, the rewards are doubled for the first 3 months after you active the card – so 6%, 4% and up to 2%.

    I’ve personally never had any problems with my Amex, but I’ll be happy to switch to MC, which is accepted everywhere, unlike Amex. I’ve already made my application, I look forward to receiving it!

  7. 10 Dux // 2014.09.29 at 4:14 pm

    This is going to be a nightmare for Bellingham, WA and other border locations

  8. 11 John // 2014.09.28 at 12:42 am

    I have many friends where the only reason they have Amex is so they can use it at Costco, most are not fans of American Express and in Canada it is not as widely accepted as Visa or MasterCard. Amex generally charges vendors higher fees than visa or mastercard, my car mechanic, for example, no longer accepts Amex due to the higher fees. Based on this, I’m thinking Amex may have wanted to increase the fees they charge Costco and that didn’t go over too well. If that is in fact the case, good on Costco for looking after their Members as any increase in fees would be funneled down to the consumer in higher prices.

  9. 12 h // 2014.09.26 at 11:17 am

    business economics is most important. let us see how long Capital One will dance to the tune. Amex has strong business policy and share holder values.

  10. 13 David // 2014.09.25 at 12:43 pm

    Over the past several years, my wife and I have stopped using Visa and Discover due to issues with billing or customer service. The only accounts we now use are the TrueEarnings AMEX and Capital One MasterCard. We pay our balance in full every month and don’t worry about interest rates.

    We only have an American Express card account because it is the only credit card accepted for payment at Costco in the US. We have been happy with AMEX and recently received replacement cards with a new number due to a cluster of fraudulent transactions on our original account. I disputed the charges on Friday, August 29 and received the replacement card by regular mail on Tuesday, September 2 (the day after the Labor Day weekend). We had excellent customer service with AMEX and have had no problems with the annual rebate checks.

    If (or when) Costco switches to Capital One MasterCard in the US, we can go back to putting all of our charge activity on the MasterCard account and would cancel the AMEX (and its annual charge).

    • 14 Greg // 2014.09.25 at 6:02 pm

      Hey David, hope you know if you have a AmEx thru Costco (part of membership if you choose) then there is no annual fee, unless that has changed and I am grandfathered in. So if it’s a Costco-Amex and you are getting a fee, get it refunded, retroactively, for every year it was charged.

      Guarantee if AmEx charged a separate fee I cancel that very minute.

    • 15 Kimberly // 2014.09.26 at 2:16 am

      @David – If your AmEx is the co-branded Costco TrueEarnings card, the only fee you should be paying if for your Costco membership. But you shouldn’t have an extra AmEx fee on top of that.

  11. 16 bostondann // 2014.09.25 at 7:16 am

    Thank Goodness Costco is ditching American Express. I hate …. HATE … H-A-T-E American Express for a myriad of personal and professional reasons. I would like to take advantage of the cash-back and other offers but simply cannot bring myself to apply for an evil AMEX card.

  12. 17 bluebell // 2014.09.25 at 6:07 am

    costco is probably looking at ditching amex in the states as well. Why else would they go with cap one? If it was just canada that was changing to mastercard, then a big 5 canadian bank would probably have gotten the contract. Maybe TD though but TD doesn’t have a presence in the uk like cap one does.

    • 18 bluebell // 2014.09.25 at 6:10 am

      or maybe not lol

  13. 19 Carl Lind // 2014.09.24 at 7:18 pm

    Unlike American Express, My USA-issued Capital One card doesn’t charge foreign transaction fees when I’m in another country.

  14. 20 Tle // 2014.09.24 at 6:23 pm

    Well, I hope Costco US don’t change to Capitol One. I think Amex has one of the best customer service. I use the Costco Amex to also make other purchases outside of Costco. The few times that I have problems with the charge or the vendors, Amex customer service came through. I wasn’t on hold forever, I did not have to go through two minutes of listening to menu options to get to a representative and I never have to deal with a customer service center outsourced oversea!
    So if Capitol one is the new card provider, then I hope their customer service is top tier.
    What are the complaints about the rebate checks? I am glad I am getting a check.

    • 21 Kimberly // 2014.09.26 at 2:22 am

      @Tle – I’m with you, I like getting some of my money back. However, people don’t like that the check just looks like it is part of the bill, or that you can’t get it reissued if you don’t get it spent in time, or they feel like AmEx was rude to them about the check when they spoke to customer service. I’ve gotten a lot of email about this, plus there are a lot of negative comments on a blog post I did about the TrueEarnings card. I’m okay with AmEx, myself, and I’ve never missed the rebate check, so I don’t have that issue with them either.

      My mom has a Capital One card and said that their customer service is actually pretty good and she’s never had any major issues with them. Plus, it is nice that they don’t charge foreign transactions fees (which is why she wanted the card), if that matters to you.

  15. 22 Greg // 2014.09.24 at 5:59 am

    Coming soon to the USA? Honestly, I hope not. I only have my Amex due to my Costco membership (and didn’t really like getting it), but I would be a bit irritated if I had to change cards just because Costco wants to change affiliations. Besides, Capital One as a credit company is more repulsive to me than Amex, primarily due to their irritating ads.

    I probably in a minority in the world, but I despise having multiple cards or providing info to these companies. It increases risk and brings me no value, so to have to change cards at a company’s decision is a bit of a turn off. I have one consistent card (Visa) since 1992 and otherwise just this Amex that I use for Costco and gas.

    Should this come to the USA, I hope Visa is also acceptable. I always thought Mastercard and Visa were the same (never heard of a place accepting one and not the other) and would greatly prefer to just use the one card I have.

    • 23 Kimberly // 2014.09.24 at 7:08 am

      @Greg – I assume that just like in Canada, Costco US and AmEx have a contract period but I’m not sure when the US contract is up. I’ll bet that AmEx will try harder to keep the US deal too since there are more stores and customers in the US, and presumably a lot more money. However, it’s hard to believe that Capital One won’t want to try to get a deal going with Costco US too. I’ve never dealt with Capital One so I’ve got no input or background as to how good or bad they are, but I do know that I get a lot of complaints about AmEx’s co-branded cards in the US.

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