Final Details How Costco’s Transition from Amex to Visa Will Work

American Express lost 10% of its card business when they lost the Costco deal. Here’s an inside account of how American Express lost the business. As costly as it was for American Express to lose Costco, it would have been more costly to retain Costco.

Details of the new Citibank Costco card were leaked in a regulatory filing, and we learned early that it was basically the same product offer as the American Express Costco card — only a Visa rather than an American Express.

Costco’s switch to Visa though was delayed. This is a complicated transition for the merchant and for the banks, especially with Citibank picking up American Express’ “back book” (Citibank bought the existing card accounts from Amex).

Now we have a timeline, and what happens next. Via Wallaby Financial,

  • American Express will continue to be accepted at Costco through June 19
  • Starting June 20, Costco will accept only Visa, cash, checks, debit cards, and Costco cash cards

Via Doctor of Credit, Costco has detailed what happens to American Express Costco card cardholders.

  • Amex Costco cards will stop working June 20.
  • Cardholders will automatically receive their new Citibank Costco Visa. No application is needed, no hard credit pull will occur.
  • Cardholders will retain the same credit line, and new cards will be shipped in May or early June.
  • Cash back earned on the Amex Costco through June 19 “will automatically transfer to the new credit card from Citibank”

The new Citibank-issued Costco card will be available to new signups mid- this week, two months before existing Costco Amex cardholders get their hands on it. The application should be available at citi.com/WelcomeCostco.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Correction:
    “Starting June 20, American Express will accept only Visa, cash, checks, debit cards, and Costco cash cards”

    should read Costco rather than American Express.

  2. Does this mean I can use any credit card as long as it is a Visa? What about non Costco Citibank credit cards?

  3. Now one more reason to have a Sapphire Preferred card. I plan on using this for my Costco purchases, except gas. They will give me 3 points for,those purchases with Exec. Level card.

  4. Will MasterCard be accepted as well? I have always thought that Visa and MasterCard were interchangeable but maybe this is not correct.

  5. Don’t forget that you can already pay for Costco purchases with any credit card IF you buy a Costco cash card online on the Costco website.

  6. A real monkey wrench could be done by other banks issuing Visa cards, if they did double or triple points for Costco purchases. This is a real possibility that could not happen to American Express. Even though other banks issue Amex cards, there aren’t that many in the wild.

    It is time for the bloggers to push for this opportunity! I have no plans for getting the Costco Citibank Visa card. Just isn’t worth it to me. But, I have a Chase Sapphire Preferred Visa Card and it would be really cool to earn extra points with it at Costco.

  7. @Shari Nope. MC and V have always been completely separate networks, despite similar fees so most merchants take both or neither.

    Most products only come in one variety but others (BoA BBR and historically CSP) come in both. But the competition isn’t limited to MC/V. USB’s FP comes in V and Amex flavors. Only the V got free WiFi passes but Amex earns more in certain cats but doesn’t count Kiva as charity. Small but important differences!

  8. Same question is Jackie’s: will my freedom card earn the 5% bonus from June 20 to June 30? I note that the freedom website did not specifically exclude Costco nor did they indicate that the 5 times points could be had here.

  9. The one thing I liked about American Express/Costco card was my picture on the card. Does
    Citi VISA intend to offer the same?

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