The Costco / American Express Breakup
If you have a Costco AMEX card, you should be preparing for the transition to VISA.
Provided by Michael Fassi CLU, ChFC
The longstanding, exclusive partnership between Costco and American Express is coming to an end. If you have a Costco AMEX card, what does this mean for you?
In May or June, you should get your new Costco VISA card. So if you make auto-payments to Costco, you should re-enter your credit card information (the new number, and any other changes) before June 20.1
June 20 is the deadline. Beginning that day, Costco will only accept VISA cards, cash, checks, debit and ATM cards, EBT cards, and Costco Cash cards as forms of payment.1
Citigroup is issuing the new Costco VISA card. The new card allows the cardholder to get 4% cash back on the first $7,000 in eligible gasoline purchases per year and 1% on eligible gasoline purchases thereafter. Cardholders will also receive 2% cash back on all other Costco and Costco.com purchases. Other perks include 3% cash back on restaurants and eligible travel purchases and 1% cash back on any other form of purchase.1
In comparison, the Costco AmEx card offered 3% cash back at gas stations nationwide (with a $4,000 annual ceiling on such rewards), and 2% cash back on eligible travel and dining purchases.1
This changeover is projected to affect about 10% of AmEx cardholders. Indeed, there are some people who signed up for their first AmEx card just because of the Costco-AmEx relationship.1
Will this changeover have any effect on credit scores? Citibank will not be reviewing credit reports pursuant to the account transfers, so the answer should be “no.” Costco AmEx cardholders can maintain their current line of credit.1
Will Costco AmEx cardholders have to pay down account balances by June 20? No. American Express says that Costco AmEx cardholders may still carry a balance after that date.1
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1 – marketwatch.com/story/5-things-to-know-about-the-costco-and-amex-breakup-2016-02-11 [4/5/16]