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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