Costco to accept Visa cards starting April 2016

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Costco has reached an agreement with Citi for a new co-branded credit card program, shortly after dropping its similar deal with American Express.

Costco has reached an agreement with Citi for a new co-branded credit card program, shortly after dropping its similar deal with American Express.

Costco says it will start accepting Visa rather than American Express at its U.S. stores on April 1, 2016.

Currently, the wholesale club retailer has accepted only debit cards and Amex for purchases in its stores or at its gas stations, although it also accepts Visa and MasterCard for online purchases.

Most retailers who accept Visa also accept MasterCard, but Costco will be an exception to that rule.

The only credit cards it will accept for store and gas station purchases will be Visa.

Details about the new card's benefits and terms will be made available to members soon.

The Costco Amex card offered card holders 3% cash back for gas, 2% for restaurants and travel and 1% back for everything else, and there was no annual fee as long as the user was a Costco member.

The deal anticipates the purchase of the existing co-branded Costco Amex card portfolio by Citi.

Citi is the world's largest issuer of consumer credit cards and has co-branded cards with other retailers, including Sears, for which it has issued a Sears MasterCard.

Note: An earlier version of this report incorrectly said the deal between Citi and Costco would take effect on April 1, 2015.

By Chris Isidore for CNN

7 comments

  • Matt

    Hey, it’s not just COSTCO that has dumped American Express over the years. Merchants all over the place have dumped them because they are a pain to deal with and the merchants were losing money. Customers could buy some product with the AE card, abuse the heck out of what they bought, then go back to the merchant demanding a new product. The merchant would deny the new product purchase and the customer would complain to AE. AE would demand that the merchant replace the product for the customer. I worked for a company in Orlando, FL that had that very thing happen all the time. After three months we dropped AE and then returning customers were all ticked off.

    • lisa

      you are completely misinformed. It is a FCC regulation that if you have an issue with a purchase made on your charge card the vendor has to fight the store over your refund. When you use a charge card you did not make the purchase. The charge card company made the purchase as your so called agent. Then you pay the charge card company when you get your bill. Whether the merchandise is damaged, or the company went bankrupt and you didn’t get your service the charge card company refunds you and they fight the store business. Several years ago I bought airline tickets from Direct Air but before I used the ticket the airlines went bankrupt. I called my master card company and they refunded me my money then master card went to bankruptcy court trying to get reimbursed.

  • J Larsen

    So, does that mean that my Costco AMEX will no longer offer the cash back incentives? Will AMEX start charging me an annual fee? Or will my card be cancelled altogether? This article leaves many questions unanswered. I just got my card a few months ago, and now I wish I had not bothered.

    • Abbey Colbert

      You’ll get one more rebate check next Feb and that will be the end of the Costco checks. Amex has a pop of information on their website when you log into your account. Sounds like you will basically just get dumped into their regular rewards program in Feb next year. The bad part is that the cash back awards will stop in February but you can’t use the Visa card at Costco until April 1st. So unless you don’t buy groceries for 2 months you will build up some new reward during that time.

    • Matt

      Keep in mind that if you travel to Canada the COSTCOs there have already dropped AE and no longer honor them.

  • Credit Card Reward Fan

    So the best card to use at Costco used to be the Fidelity AmEx for 2%. (I never understood why people were so hot on their TrueEarnings Card from Costco and American Express which only earned 1% at Costco.)

    Starting April 1st of 2016, some of the best cards to use at Costco will be:

    1. BankAmericard Travel Rewards Visa which can earn 2.625% toward travel if you qualify for Bank of America’s Preferred Rewards Platinum Honors status. (Or 2.25% with Platinum status or 1.875% with Gold status or 1.5% with no Preferred Rewards status.)

    2. Capital One Venture Visa which earns 2% toward travel.

    3. U.S. Bank FlexPerks Travel Rewards Visa Signature card which earns about 1.66% toward travel on spending at Costco and about 3.32% on cell phone as well as either gas, grocery stores, or airfare, whichever you spend the most on each month.

    4. Capital One Quicksilver Visa which earns 1.5% cash back.

    You might also want to try the reward calculator at CreditCardTuneUp. com to see which Visa cards will earn you good rewards for your Costco spending and other expenses. The calculator factors in bonuses and annual fees as well.

    • lisa

      never pick a card for travel rewards nothing but a big ripoff. go for cash back you can use anywhere any time.

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