The Switch is On – Costco Now Accepts Only Visa, and the Citi Costco Card is Live!

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Costco Anywhere Visa® Card by Citi
Costco Anywhere Visa® Business Card by Citi

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.

The change was a long time in coming. Costco’s switch to Visa was delayed. But now it’s happened. The Costco Anywhere Visa Card by Citi is live.


    Copyright jetcityimage / 123RF Stock Photo

  • Costco now accepts Visa only (along with cash, checks, debit cards, and Costco cash cards)
  • Existing Costco credit card customers should have new Citibank Costco co-brand cards
  • It’s now possible to apply for the Costco Anywhere Visa Card by Citi. Applications are available online or in-store.

The no annual fee cards (that require Costco membership) offer:

  • 4% rebate on gas on up to $7000 in spend per year (then 1% back)
  • 3% rebate on restaurant and travel
  • 2% on Costco and at Costco.com
  • 1% on everything else

Citi basically increases cash back in each category by 1% compared to the American Express cobrand Costco card, with some minor differences (for instance the American Express business card had a higher gas allowance than the personal card, while Citi has the same benefits across personal and business — this is one of the few small business cards Citi offers).

This is a solid card, an improvement over the Aemrican Express offering that was a huge part of its consumer portfolio, despite the low merchant fees Costco pays. Folks who liked the Costco card will like this even more.

The big outstanding question is, what in the world will Amex do now?

Costco Anywhere Visa® Card by Citi
Costco Anywhere Visa® Business Card by Citi

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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Comments

  1. So I can’t use my Citi Prestige Mastercard or would that be allowed as well? Seems like Citi wouldn’t mind if you used any of their cards, but then again maybe Costco might?

  2. I still don’t understand what Citi gets from this deal. 95% of their cards is issued by Mastercard which is not accepted by Costco and you can use any Visa including non Citi cards. I personally have 4 Citi cards and none of them are Visa so I will use a Chase Visa. Am I missing something or Citi is missing something?

  3. @Jonathan, you can use ANY Banks’ Visa card at Costco warehouse locations, not just Citi Costco Visa. Online at Costo.com you can use ANY banks’ Visa, MasterCard and Discover card as well. American Express card has been banned by Costco/Citi alliance.

  4. I purchased a TV at Costco with my Amex card and I need to return it. Any idea on how they will issue the refund?

  5. AMEX the incredible shrinking credit card company. My spend on amex is going to be way down moving forward. Not only costco, which costco.com doesn’t even accept AMEX anymore, but my Fidelity 2% card which I use for all non-bonus spend has been switched to a visa. AMEX went from 60-70% of my monthly spend to only when I have a good amex offer.

  6. I’m assuming that everyone has received their new Citi Costco card? I’ve gotten the flyers about he switchovers and letters, but still no cards. Anyone else in this boat? Haha – not that I’d actually use this card (it’s in my sock drawer).

  7. @Jon – I was told yesterday, while returning a computer, that they will be offering store credit only to folks returning AMEX-purchased goods after June 19th.

  8. I would like to apply for a Costco Citi Visa. Never had the Costco Amex, but the new reward structure is enticing. Does anyone expect Citi to offer sign-on bonuses? I don’t mind waiting for a bit.

  9. Gary, the question I have is how this might affect/be in cooperation with the upgraded POS that Costco is slowly implementing. Personally, I’m hoping for a digital membership card in Apple and Google Wallets as well as NFC. Do you have contacts with either Citi or Costco that can shed some light on these plans?

  10. @Nick: Costco doesn’t even have a chip reader in their stores. I doubt Apple Pay will come anytime soon.

  11. @Nick, @ Santastico

    Costco’s terminal is already NFC and contact chip read capable but they haven’t activated them for whatever reason. Often it’s the POS system that isn’t yet setup to interface with the card reader setup. On many Verifone terminals you’ll see green dots on the screen indicating chip read is available.

    One cashier told me that they were expecting to activate contactless read (NFC/Apple Pay) but not chip read (dip the card), but didn’t know when it would happen.

  12. Kind of begs the question: Since these rebates exceed your valuation for SPG Amex & Chase points, do you put your gas/travel/dining/Costco spend on this card or will you still use your old cards? If not, why?

  13. @ Santastico – I think you have to look at is as there were really two deals here – which bank issued the store branded card and which brand of cards were accepted. In the past, that was Amex on both counts. Now, that has split. Visa is the only accepted card in Costco, no matter what bank it comes from. Citi (the bank) gets the Costco co branded card, meaning everyone who had the Costco Amex now has a Costco Citi.

    The Amex was a halfway decent card for people who didn’t know much about credit cards and points. For many years, it was the only card I used anywhere, and my parents and grandparents were the same way. We shopped at Costco a lot, it was no annual fee, and offered some cash back, so not knowing any better, we went with that. Now my parents and I know better and Citi likely won’t see much business from us (I’ll just put gas and Costco on it till I get a Freedom unlimited and then Costco will go on that; my parents have a Freedom Unlimited and are ecstatic to be putting all their plentiful Costco spending on it) My Grandfather will stick with it and use it everywhere he spends money and my boyfriend will be another good customer. He doesn’t want to have to keep switching cards based on merchants or go buy gift cards like I do. He just wants more than his current bank issued card which is only 1% back everywhere. He spends a lot on eating out, gas, and Costco, so this card will be perfect for him. He’ll just put all his spending on it. My guess is a lot of Costco Amex customers are this way, and this is what Citi is going for.

    @ MT – I don’t think I ever saw Costco do a sign up bonus on the Amex, so I doubt there will be on this one, but who knows. Citi may want to try to attract new shoppers especially since they are competing against other Visas. At best, you’ll see some sort of statement credit.

    @Boraxo – with Chase offering 2x points on stuff like travel and dining, even if only valuing 1.5 cents/point, you still tie there with the potential to get even better value. I would imagine the Ink becomes a bit closer on gas. I can’t speak for Gary, but I would imagine the SPG is probably the loser here. Unless you have a particular airline or hotel award night you’re chasing and need to top points off for, I would imagine that the SPG card will only be useful for unbonused spending elsewhere.

  14. My costco amex never came out of the drawer; 3% gas was ok, but when I wanted to thin my wallet, it was the first to go.

    But 3% for travel and dining makes this card a strong contender, especially with SPG Amex losig its luster with the impending Marriot merger. Chase Sapphire Preferred is 2x on those categories, and I know Gar values those close to 2 cents. But I have a hard time valuing them much over 1.5 cents, and if the desicion is close, cash is always king.

  15. @askmrlee @Boraxo
    I’ve used my Samsung Pay NFC @ Costco for several months now, both with AMEX and just yesterday with Chase Visa. Checkers are very surprised, but it has worked flawlessly.

  16. @Jim Samsung Pay uses MST NOT NFC. MST works on ALL magnetic strip readers including those without NFC.

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