Costco US Agrees to Citi Co-Branded Card and Visa Network

March 2nd, 2015 · 23 Comments

Well, all of the speculation about Capital One becoming the new co-branded credit card partner for Costco US was for naught.  Costco announced today that their new card partner will be Citi!  In addition, the new card network will be Visa.   This change to Citi and Visa will take place across all locations in the US and Puerto Rico beginning April 1, 2016.

Citi is the largest issuer of consumer credit cards in the world.  I had heard some rumours that Citi was really wanting to win this deal, so I guess they made a much more persuasive argument than Capital One.  The agreements with Citi and Visa are contingent on the purchase of the existing co-brand credit card portfolio by Citi.  I’m not exactly sure how this transition will work and at this point there are not many details about that process.  Costco says that they will be providing this information in the coming months so that the transition to the new cards go smoothly.

So far Costco has not provided any other details of the co-branded card, just that the new Citi Visa will provide “rewards to Costco members and serve as a membership card”, pretty much the same way as the American Express card currently.  I am anxious to hear what type of rewards they will be giving, but I’m hopeful that it will be as good, if not better, than the American Express TrueEarnings card.

The switch to using Visa as the card network will mean that all Visa cards will be accepted at Costco, not just their co-branded Citi card.  I imagine that will probably come as a relief to all of the people that like to keep the number of cards in their wallet to a minimum since they probably already have a Visa, if they decide not to get the new Citi Visa card.  I imagine that this will also thrill all of the people that were so dead set against having a Capital One card too.

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23 Responses so far ↓

  1. 1 Harold // 2015.03.15 at 9:56 pm

    Having my ancient Amex green card switched to a Costco Amex saved me $85 annually. I always loved Amex’s customer service. So now I’ll get to pay for an executive membership and an Amex green card. Citi cards are free – at least the basic ones.

    • 2 npbk // 2015.03.16 at 8:21 am

      why dont you converter your amex green card to a fee free amex card? There are plenty of them.

      • 3 Harold // 2015.03.19 at 2:30 pm

        Good point. No valid reason. Maybe no preset spending limit and because it looks cool? I know that’s stretching it.

  2. 4 Whit // 2015.03.10 at 8:37 pm

    If you cancel your Amex and it has a long history, it could ding your credit negatively. I’ve had mine long enough that I’ll just see it through to whatever they transition. I don’t know how bad it could look canceling a card though but I’ve always heard it’s not the best thing.

  3. 5 Mike // 2015.03.06 at 2:58 am

    I’m with Rebecca on this one. No Visa, not even from USAA, matches Amex for customer service and support.

    Greg – The idea of cancelling so that new offers can be accepted is clever.

    • 6 Anonymous // 2015.03.09 at 5:32 pm

      I agree. AmEx does have premiere customer service and support. We’ll keep using AmEx card for cash rewards, and will use our existing Barclay VISA at Costco. Not interested in dealing with CitiBank.

  4. 7 Cash Back Credit Cards Fan // 2015.03.04 at 5:46 pm

    So, until 4/1/2016, probably the best card to use at Costco is the Fidelity AmEx for 2%. (I never understood why people were so hot on their TrueEarnings Card from Costco and American Express which only earned 1% at Costco.)

    Starting April 1st of 2016, some of the best Visa cards to use at Costco will be:

    1. BankAmericard Travel Rewards Visa which can earn 2.625% toward travel if you qualify for Bank of America’s Preferred Rewards Platinum Honors status. (Or 2.25% with Platinum status or 1.875% with Gold status or 1.5% with no Preferred Rewards status.)

    2. Capital One Venture Visa which earns 2% toward travel.

    3. U.S. Bank FlexPerks Travel Rewards Visa Signature card which earns about 1.66% toward travel on spending at Costco and about 3.32% on cell phone as well as either gas, grocery stores, or airfare, whichever you spend the most on each month.

    4. Capital One Quicksilver Visa which earns 1.5% cash back on all spending including Costco.

    You might also want to try the reward calculator at CreditCardTuneUp. com to see which Visa cards will earn you good rewards for your Costco spending and other expenses. The calculator factors in bonuses and annual fees as well.

    • 8 npbk // 2015.03.04 at 9:40 pm

      So for people like me who dont travel much, the best bet is only 1.5%. Sigh……

    • 9 Justin // 2015.03.16 at 11:42 am

      Often warehouse clubs are excluded from rewards on many credit cards, so you may want to check the fine print and see what the cards say

  5. 10 Justin Bell // 2015.03.02 at 2:57 pm

    I am very happy with amex customer service, they really stand behind their card holders in most situations in disputes, this would be my biggest concern with switching to citi. The extended warranty, bad customer service etc is handled really well by amex

  6. 11 Gary // 2015.03.02 at 2:35 pm

    I’m tempted to cancel my CostCo Amex card before the transition. They offered me $55 ($50?) and a free bag to get the Amex in the first place, I’m sure there will be some deals like this to get the CitiCard.

    But NOT if they just transition you over, they’ll already have you…

  7. 12 Rebecca // 2015.03.02 at 1:29 pm

    Read all the CITI reviews on GENERAL web sites rating credit cards. And I’m talking CURRENT reviews! HORRIBLE! They refused to honor advertised promos! They up and cancel your card with no warning and it’s not that folks didn’t pay bill. They had good credit, but CITI decided they didn’t want them with ZERO balance! They treat business owners unprofessionally. The list goes on and on.

    Costco as Buffett said will NOT get rich on this deal. I will NOT switch. Hell will freeze over.

    I dumped them a long time ago, and not putting up with them again.

    Does sound like any Visa will work in future, so I’ll get my points and rewards on my existing Visa that I love. And it’s NOT a CITI Visa.

    • 13 Kimberly // 2015.03.03 at 3:48 am

      @Rebecca – Do you work at American Express?

      • 14 david // 2015.03.27 at 9:30 am

        Why the cheap shot at Rebecca. I don’t work anywhere near the financial industry and will never carry another CITI card. They also offered me a card that had great cash back rates ranging from 1-3%. After a few months they switched me to another card, without my consent, that they claimed would be more beneficial for me and that they were discontinuing the card/rewards program I had signed up for. Given that they had access to my purchase history, they knew this was BS. Further, CITI continued to offer the card/program I had been in.

        Another reason I will never do business with CITI is I have a problem doing business with cronies. CITI has been bailed out by the U.S. Taxpayer six times in the last 20 years.

        • 15 Kimberly // 2015.03.27 at 9:44 am

          @David – Because I can tell the where she was when she made her comment – at American Express headquarters in New York.

  8. 16 Greg // 2015.03.02 at 12:54 pm

    Hate to post again so soon, but just noticed this, BTW:
    . . . . “agreements with Citi and Visa are contingent on the purchase of the existing co-brand credit card portfolio by Citi.

    If anyone from Costco is reading, I think it is best to offer members the chance to opt out of that transfer of info to Citi, or perhaps I’ll just cancel my Amex now so as to avoid it. I have my home spam down to nearly nothing, and am no fan of any company transferring my info without my approval. My rule is “you spam me, and you never get my business … ever.” If Citi starts spamming my mailbox with their junk, they had better be happy to spend money on postage back to them that will tell them where to go, just like Cap One does now (and still those clueless blankety-blanks don’t get the drift).

    To be sure, I will go online and amend my Amex registered email address to one of my junk addies that I always ignore, but I don’t have that option with my mailing address.

  9. 17 Greg // 2015.03.02 at 12:36 pm

    Hey, I am really pleased with this. Honestly – first time I have been pleased with Costco in about 6 months when their South Austin customer service people really ticked me off (have been mostly avoiding Costco since then) by flat out reneging on a prepaid deal.

    Am no lover of any credit card companies, but between Citi or Cap One I’ll take Citi any day. Plus it’s Visa and not MC, so I’ll have no issue using my regular Visa which already has very good rewards. I can happily kill my Amex and just go back to being a one card guy, but I may apply for this just to have a back up.

    Will wait to see what it offers – if I can get about $250 of additional benefits over my current Visa, it’ll be worth it, but if not basically no change and no sweat. Sweet.

  10. 18 Rebecca // 2015.03.02 at 12:25 pm

    This sucks, CITI loves to spam you and customer service stinks. Try to dispute a charge with them. Costco just DUMBED down. And don’t expect the service or products to stay the same. After all AMEX card members have great credit and more money to spend. CITI has a lot of folks that default. Lower income. Nothing against these folks, we have all made much less BUT they will NOT spend the same amount on the same products. They are going to want Costco to become BJs or Sams Club.

    I think Costco just changed it customer base to one that is going to hurt them staying “who they are”.

    And I don’t think they will accept ANY VISA, we will see. If so, I have a VISA I love from Barclays with great rewards when I am not using my AMEX. I will NOT use the new CITI co-brand and put up with their horrible service centers. Not worth it. So CITI will NOT be getting me as a new customer. I dumped them LONG ago.

  11. 19 Rick Vanover // 2015.03.02 at 10:02 am

    @NPBK While we don’t have the details yet – the “natural” conclusion is to assume the program will be the same or better for the Coscto member. This is a risky proposition, as for members like myself I may not renew my membership until the details of the new program are out.

    From an operational perspective, this new card has to be promoted some amount of time before the AMEX deal expires. So, there may be some front-loading of promoting the new card, it really should be in every (interested) member’s wallet by the day it comes around.

    As for the Cash back, again, I’m pretty sure the CITI card will see a new program launched, ideally new and best yet for CITI….

    • 20 Kimberly // 2015.03.02 at 10:08 am

      In Canada they had an overlap of several months before the expiration of the deal with American Express so that the transition could go smoothly for members. I imagine it will be the same with this change. I would also think that the rewards will be pretty similar as well, again, that’s how they managed things in Canada. I’ve not really looked at the Citi rewards cards so I’m not sure what all they have on offer already, but hopefully, as Rick said the Costco card will be better than whatever they’ve got already.

    • 21 npbk // 2015.03.02 at 10:13 am

      Thanks Rick. To be honest I doubt the new costco citi card would offer impressive cash back, given the mediocre (to me only) costco amex card it currently provides. But who knows. In the worst scenario I would just but costco cash card online with my 2% cash back credit card and try to make sure my wallet would be lost.

  12. 22 npbk // 2015.03.02 at 9:58 am

    This is interesting. What is the best VISA card cash-back-wise? I used the FIA AMEX for 2% all the way, and expected to have a CITI MasterCard double cash card for 2% everything assuming Costco was going to accept MasterCard.

  13. 23 Rick Vanover // 2015.03.02 at 9:49 am

    Interesting. I’ll be very interested to check out the card and program they offer.

    I’m an American Express fanboi all the way, so we will be interested in the program that Citi puts together! But, in all fairness, congratulations Citi. This is a big deal.

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