- 1 Costco No Longer Accepting American Express In 2016 After Striking Deal With Visa, Citigroup
- 2 Costco American Express TrueEarnings Card: What’s Good & Bad
- 3 RewardsCreditCards.org ∙ The Best Points & Mileage Credit Cards
- 4 American Express Costco True Earnings Business Card – For All the Costco Fans?
- 5 Without Amex by its Side, Costco Looks to Visa & Citi for Co-Branded Cards
Costco No Longer Accepting American Express In 2016 After Striking Deal With Visa, Citigroup
Customers at Costco. (Photo by Kevork Djansezian/Getty Images)
FOSTER CITY (CBS / AP) — If you’re shopping at Costco, you’ll need a new credit card to pay for those family-sized packs of chicken breasts or toilet paper.
After only accepting American Express the last 16 years, the retailer is switching to Foster City-based card giant Visa and will use Citigroup as its exclusive provider of co-branded credit cards.
Costco is a large and influential chain. It is the world’s second-largest retailer by revenue, and has 671 locations around the world, including 474 in the U.S. and Puerto Rico. For an annual fee of $55 to $110, shoppers get access to groceries in bulk sizes, as well as appliances, jewelry, home goods and other products.
The switch from AmEx to Visa could mean changes for some of those customers. Here are the things you need to know:
Costco will only accept Visa credit cards at its stores starting April 1, 2016. Customers will also be able to use Visa and MasterCard debit cards, or pay in cash. American Express credit cards will no longer be accepted on that date. That’s a hit to AmEx. Last year, Costco accounted for 8 percent of American Express billed business, 10 percent of its cards in force and 20 percent of its worldwide loans.
Citigroup is also expected to take over the existing American Express Costco credit cards.
WILL I HAVE TO REAPPLY FOR A COSTCO CREDIT CARD?
Costco hasn’t said yet whether people will have to reapply for its rewards credit card. Citigroup says it plans to make the transition from AmEx to the Citi’s Visa card as “seamless” as possible.
Costco card holders probably won’t need to reapply, industry experts say. However, a small number of Costco card holders won’t be approved for a Citi card. American Express and Citi have different credit standards and a person who may have qualified under AmEx may not be approved under Citi. The people affected are likely to be small, however, since American Express’ qualifications are some of the highest in the industry.
When its agreement came up for renewal, AmEx and Costco were unable to reach a deal that both sides liked.
WHY ANNOUNCE THIS A YEAR AHEAD?
After the announcement last month that Costco was ending its relationship with American Express, “we wanted to reassure everyone that we had another deal in the works,” says David Sherwood, director of finance and investor relations at Costco.
WILL THE CITI CARD OFFER SIMILAR REWARDS AS AMEX?
That is still to be determined, but industry experts say it is likely. As with the American Express card, the new Citi card will have no annual fee, Costco says. And like with AmEx, the new card will serve as a membership card.
With the Amex card, Costco customers get 3 percent cashback on fuel purchases, 2 percent back on restaurants and eligible travel and 1 percent cashback on all other purchases. The cashback comes in the form of a check issued every February. Customers can use the check for goods at a Costco checkout line, or redeem it at the customer service desk for actual cash.
The cashback program on the American Express card was good for Costco because customers would use their checks to buy more Costco goods. Citi also has a long history of issuing credit cards with cashback programs.
“It makes sense from Costco’s perspective to have the cashback program,” says Ken Paterson with Mercator Advisory Group, a banking industry consulting firm.
WHAT ABOUT THE CARD I HAVE NOW?
Any cashback rewards earned on the Costco American Express card will be valid, Costco says. Cardholders have until August 31, 2016 to redeem the rewards that are issued in February 2016.
© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.
Costco American Express TrueEarnings Card: What’s Good & Bad
If you do not know it yet, Costco stores do not accept any credit card except for American Express (Amex). Either you will have to pay cash, checks, debit cards, Costco Cash Card or any Amex credit card. As such, Costco has formed a partnership with AMEX and offers the Costco American Express True Earnings Card.
But how good is this True Earnings Card?
Will this be the right card for you?
Here is a closer look of the good and the bad aspects to determine if this is right for you before signing up or opening a new account!
Well, it is a credit card and a Costco Membership card at the same time. What I like about this is that your Costco membership number is also imprinted on the card along with the photo of you. So when you go into Cosctco, you do not have to carry the Costco card with you, you can just flash your True Earnings card and they would let you in and allow you to shop at the store. It is also convenient when you pay at the Costco gasoline stations as you will only have to slide one card in order to purchase gas.
Pay Annual Costco Membership Automatically Using the True Earnings Card.
You also have the convenience of paying the annual Costco membership automatically using the True Earnings card. One reason that I have this done is to avoid missing the rewards because of not having have a valid Costco membership as discuss later on the “The Bad” side.
There is no annual fee for the card.
The biggest cash back is 3% but it only applies to gasoline purchase of up to $3,000 and the cash back is then reduced to 1% thereafter. It also offers 2% cash back when you use at restaurants or for travel and only 1% for everything else including shopping at Costco. Yes, the card is not limited into shopping at Costco exclusively, you can use it anywhere else, too.
Unlike the Costco Executive Membership that limits the cash back to just $750 (November 1, 2011), there is no limit to how much cash back rewards for your purchase.
The rewards coupon can be redeemed at the Costco warehouse stores for Costco merchandise, cash, or cash equivalent. The coupon has no value if not redeemed in person at a Costco Warehouse before the expiration date (usually August 31 of the year of issuance). If you do not use the entire coupons on a Costco purchase, any unused portion of your reward coupon may be issued in cash or cash equivalent at the Costco Warehouse.
Costco TrueEarnings Cardmembers have access to Global Assist ® Hotline, Roadside Assistance, Car Rental Loss and Damage Insurance, and Travel Accident Insurance.
- Global Assist Hotline – provides emergency assistance for Cardmembers traveling at least 100 miles away from home. While the many Global Assist Hotline coordination and assistance services are free benefits from American Express, Cardmembers are responsible for the costs charged by third-party service providers.
- Roadside Assistance dispatch service is available to Cardmembers when they travel by car.
- Car Rental Loss and Damage Insurance – Car Rental Loss and Damage Insurance can provide coverage for theft of, or damage to, most rental vehicles when you use your TrueEarnings Card to reserve and pay for an auto rental.
- Travel Accident Insurance – Travel Accident Insurance can provide Cardmembers accidental death and dismemberment insurance while traveling on a Common Carrier Conveyance (plane, train, ship, helicopter, or bus) when the entire fare has been charged to the TrueEarnings Card.
Cancellation and Forfeiture of Rewards With No Valid Costco Membership
The problem with the earned rewards is that you must have a valid Costco membership at the time of receiving the rewards. Your American Express account will be cancelled and your annual rewards forfeited if you cancel your Costco membership. So if you have this card and you intend on canceling your Costco membership, make sure that you review your reward statement to see if you still have cash back rewards available before canceling. In addition, if you inadvertently forgot to pay for your membership, you may end up not receiving the rewards. One convenient way to ensure that your Costco membership stays active is to have your annual membership fee automatically billed to your TrueEarnings Card. Please contact Costco at 1-800-774-2678 to enroll in the auto-bill feature if you are not already enrolled.
The rewards expire really soon. Usually, the cash back rewards are issued on February of each year and must be used by August 31 of the same year. Otherwise, it will be forfeited.
When I lost my True Earnings card, I have to call AMEX to cancel the card and to send me a new one. Little that I know that my Costco membership card was canceled as well. When I went to pay using the old Costco membership card, it was not working as the old number was no longer recognized so I ended up getting a new Costco membership card with the new number (and it has to match what’s on my True Earnings Card).
Because the True Earnings card is tied to your Costco membership, you cannot just add any other card holder unless he or she is also the “additional household member” card holder for the Costco membership card.
The coupons may only be redeemed by the either one of the card members listed on the account (the main member or the additional Cardmember on the TrueEarnings account). However, additional Costco card holder Household Membership Card holder cannot redeem the Annual Reward Coupon of the costco member unless he or she is also a Cardmember on the TrueEarnings account.
The annual interest rate is at least 12.99% and they do not offer anything lower even if you have excellent credit history. Nothing new with all AMEX cards. So if you do not pay off your card after the purchase, then any rebates that you’ll get will be offset by the interest that you’ll pay in the long run.
- Rewards coupon may not be used to pay for the outstanding balance on your AMEX card
- Rewards coupon cannot be redeemed at Costco.com, only at the stores.
I own the card and the cash backs are a thing of beauty since I do get quite a bit. Using the card for purchases really add up to the savings. The limitations, in my opinion, are very minor compared to the overall benefits of having one.
I LOVE Costco and this card rewards, however will be canceling it. I get electronic statements and should receive a paper bill once a year that includes my coupon. I have not received this paper statement for the last 4 years. It takes time and many months to resolve this issue EVERY YEAR. I am in the middle of it, yet again.
Here’s another thing to watch out for that’s related to the point made in the article that the AMEX True Rewards card is automatically canceled if you do not renew your Costco membership: this can result in a hit to your credit score, which can can affect other things, some very significant in your life, such as the rates you pay for auto and homeowner’s insurance and your ability to get a new job or rent a new apartment, or the interest rate you would pay for a new mortgage or auto loan.
Your credit score will drop when you or AMEX cancels your True Rewards card. The amount it will drop will depend on a couple of additional factors: how long that account has been open, particularly in relation to your other active credit accounts–if it’s your oldest or only credit card and has been open for ten or more years, your credit score could drop significantly. It also depends on how much available credit AMEX specified the account had compared to your other sources of available credit. If you have a total of $20,000 in available credit on credit cards, but half of that is tied up in True Rewards and that account is closed, your credit score will take a significant hit. These factors apply to ANY major credit card account that gets closed–it’s just that those accounts are not tied to something like a Costco membership.
So I guess there are two takeaways for this: make sure you like Costco before you take out a True Rewards card, and don’t let the percentage of available credit on this particular card get too high in relation to your other available credit from other credit cards. (If this card has a $3000 limit and you have other cards with $50,000, and they’re all older accounts than this one, then losing this card will have little effect on your credit score or other things tied to that like auto insurance rates.)
RewardsCreditCards.org ∙ The Best Points & Mileage Credit Cards
American Express Costco True Earnings Business Card – For All the Costco Fans?
Which person living in the United States does not love Costco? Costco is the favorite shopping choice for thrifty people throughout US. The wholesale store offers low prices on bulk products and services and sells everything right from electronics to pet supplies; Costco is as American as is hot dog. In fact, they are so American that the sole credit card accepted by them is American Express, which makes it only natural for them to team up with American Express to offer their own credit card. The American Express Costco True Earnings Business Card is a card that has traversed its path into the wallets and purses of Costco regulars Americans across the country. Costco regulars need to look no further than this credit card by American Express.
Features of the American Express Costco True Earnings Business Card
American Express Costco True Earnings Business Card is a 2-in-1 card effectively – a Costco membership card and an American Express card, making it one less card in your wallet. The card offers cardholders to redeem a percentage of the entirety that they spend at Costco and everywhere else. Unlike other cards, it offers cardholders multiple ways to earn bonus rewards and get cash back. The American Express Costco True Earnings Business Card is a truly versatile cash back credit card that lets cardholders earn up to a generous percentage of what they spend on certain designated purchases. It is a credit card designed for all those Costco members who have a good credit score and want to take advantage of the card’s competitive cash back program. There are some really good cash back rewards promises with this American Express True Earnings Business Card. It lets cardholders earn generous 3% cash back on gasoline at any of the US standalone gas stations up to the annual limit of $4,000. Beyond the limit, users get to earn 1% cash back.
The American Express Costco True Earnings Business Card also offers users 2% cash back on eligible travel purchases and US restaurants such as when you purchase lodging, cruise tickets, car rentals and airline tickets through eligible travel agents. Also, cardholders also get 1% cash back per dollar of any purchases they make at Costco or anywhere else. What’s more, there is no upper limit on the cash back reward program of American Express Costco True Earnings Business Card. Apart from the cap on gasoline prices there is no capping on any of the other purchases, which is pretty neat indeed. The card users can redeem their cash back that they have earned on their cards at Costco in yearly certificates and coupons which they can exchange for cash or merchandise at Costco. This gives them a chance to reduce their Costco bills. The coupons are issued in the cardholders’ February billing statements and expire on the 31 st of August every year of issuance.
The American Express Costco True Earnings Business Card also has a noteworthy introductory financing offer, offering 6 months of interest free financing on purchases. An additional incentive of the card is that all the purchases done by cardholders for the first 6 months of card membership are covered under 0% APR. Beyond the first 6 months, the standard APR rate of 15.24% will be applicable to cardholders. This feature is perfectly suited for people who can utilize this without accruing more interest than they can pay back, and is also excellent for any big purchases or holiday shopping that can be paid off in 6 months.American Express True Earnings Business Carddoes not have an annual membership fee either, but only Costco members are eligible for this card (which itself has an annual membership). However, cardholders can add further card members to their account free of charge, giving members the chance to earn more cash backs than ever.
Apart from its generous cash back and rewards program, the American Express Costco True Earnings Business Card provides other innumerable benefits to its members. Cardholders obtain exclusive access to tickets before they go on sale to the public, as well as discounts to all the latest family shows, sporting events, concerts and all latest entertainment events. The purchase protection plan covers and protects cardholders against any theft or accidental damages of certain eligible purchases. American Express refunds such people up to $1,000 per occurrence, limiting the offer upto $50,000 per card account annually. The free extended warranty policy ensures cardholders that American Express will extend original US warranties by one year on all items with 5 years or less warranties left. American Express Costco True Earnings Business Card also covers individuals on damages to or theft of their car rentals to the credit card. Even travel accident insurance up to $100,000 on accidental dismemberment and death is covered if travel expenses are paid for by this card. The card also carries the zero fraud liability, protecting cardholders from making any payments if any unauthorized transactions have been made through the card. Moreover, American Express does a great job of providing a comprehensive report of the cardholder’s annual expenses online, wherein it breaks down expenditure in each category and even shows the year-end summary. These reports can be effectively used to calculate reward points earned and how to gain better from the cash backs and points the next year.
Apart from some off quirks and restrictive limits, this card is still a competitive standout in a market flooded with credit cards. American Express Costco True Earnings Business Card works best for foodies, drivers and Costco customers. This card comes in great use of if you are a person who likes eating out, someone who does not carry the balance to the next month but pays each month itself, or if someone is a Costco member. Even if one is not a member, you might want to consider becoming one not only to save money and reduce grocery bills but also to gain maximum benefits off of its liberal cash back program.
Additionally, you end up getting the benefits of being an American Express member too;one ends up getting access to its well-known, exclusive member benefits such as exceptional 24 hours customer service, global assist hotline, extended warranty and free Purchase Protection.Customers can look up more details of the card on the website.
On the whole, American Express Costco True Earnings Business Card delights most customers.
Without Amex by its Side, Costco Looks to Visa & Citi for Co-Branded Cards
Costco Wholesale Corporation has announced that it will enter into a new, co-brand credit card program agreement with Citi, and an acceptance and co-brand incentive agreement with Visa. The implementation of these agreements is subject to the purchase of the existing co-brand credit card portfolio by Citi.
Under the terms of the agreements, Citi, the world’s largest issuer of consumer credit cards, will become the exclusive issuer of Costco’s co-brand credit cards, and Visa will replace American Express as the credit card network for Costco in the United States and Puerto Rico beginning April 1, 2016. Once issued, Costco’s co-brand Visa credit card will provide generous rewards to Costco members, serve as a Costco membership card, and be accepted at Costco locations in the United States and Puerto Rico, as well as all merchants worldwide that accept Visa credit cards.
Costco will provide its members with additional information in the coming months regarding the anticipated transition from its existing co-brand credit card program. Earlier, we had reported about American Express discontinuing its merchant-acceptance and co-branded credit card agreements with Costco Wholesale Corp. The contractual agreement officially expires on March 31st, 2016. Amex cards will continue to be accepted at Costco’s 474 U.S. warehouses until then.
It was expected that Costco might go for multiple card brands like Visa and MasterCard, as most merchants do. Costco already accepts Visa and MasterCard debit cards. In Canada, Costco had established partnerships with MasterCard and Capital One Financial Corp. Costco had already ended its Amex co-branded card program in Canada last year, and Bloomberg had reported that Costco was considering a new US card partner.
The Costco-Amex card accounted for around $82 billion worth of Amex’s worldwide charge volume last year. Although Amex will have to face the charge-volume hit, the Costco business wasn’t that profitable in comparison to its other card programs. Ironically, 70 percent of Amex’s Costco cardholders conduct their spending outside of Costco stores.