In the interest of full disclosure, One Mile At A Time earns a referral bonus for anyone that’s approved through some of the below links. These are the best publicly available offers that we have found for each card. Please check out our advertiser policy for further details about the partners we work with. Thanks for your support!
As we’ve known since early last year, Costco is replacing American Express with Citi for their exclusive credit card agreement. With Citi taking over the contract, all Visa cards will eventually be accepted at Costco stores.
Citi was supposed to be taking over the Costco contract from American Express on April 1, though in early February we learned that would be delayed, and that American Express cards would continue to be accepted at Costco stores until at least June.
Then in early March we found out the reason for this — American Express is selling their portfolio of Costco cardmembers to Citi in a billion dollar deal, meaning those with the Costco Amex will have their card converted into a Costco Visa in the coming months. This will make the transition easier for cardmembers, since those who want to continue to have a Costco credit card won’t have to apply for a new one.
Official Costco transition date from Amex to Citi
We now have information from Costco as to the timing of the transition from American Express to Citi:
- American Express cards will be accepted at Costco stores through June 19, 2016
- Starting June 20, 2016, only Visa credit cards will be accepted at Costco stores
- Cardholders should receive account information from Citibank starting in April 2016, and will be mailed their new Citi Visa Costco cards in May or early June 2016
- Rewards earned through the Costco American Express will transfer to the Costco Citi Visa
- There will be no credit pull as part of the transfer process, and cardholders will maintain their credit line
While the process has been drawn out, overall I think American Express and Citi are doing a pretty good job with the transition. That’s especially true when you factor in that initially Costco American Express cards weren’t going to be converted into Costco Citi cards, but they found a way to make it mutually beneficial, which is good for consumers.
If you just want to keep using your Costco card for everyday spend, you don’t have to do anything. Meanwhile check out my previous post if you’re looking for a new American Express card to replace your current Costco card.
Best credit card for Costco spend?
I do wish Costco accepted all Citi cards, rather than just call Visa cards. I find that a bit puzzling, since it’s Citi which bought the portfolio, and not Visa. In other words, you’ll be able to use the Chase Sapphire Preferred® Card at Costco stores, but not the Citi Prestige® Card or Citi ThankYou® Premier Card (since they’re issued as Mastercards).
Chances are that the best card for Costco spend will be the new Chase Freedom Unlimited, which will offer 1.5x points per dollar spent (which can be converted into Ultimate Rewards points in conjunction with the Chase Sapphire Preferred® Card or Ink Plus® Business Credit Card).
I still can’t rationalize that whole setup, given that so many Citi cards are Mastercards and not Visas.
American Express cards will no longer be accepted at Costco as of June 20, 2016. If you have a Costco Amex card, there’s nothing you need to do — you’ll automatically receive a Costco Citi Visa card in the mail, and your credit line and rewards points will automatically be transferred.
(Tip of the hat to View from the Wing)