Financial analysts have been chomping at the bit in anticipation of who would scoop up the CostCo credit card portfolio after American Express failed to renew their contract. The wait is finally over as Citi announced on March 2, 2015 that they're the apparent new partner and will issue VISA CostCo cards beginning April 1, 2016.
Currently CostCo Warehouse members can pay with their American Express TrueEarnings credit card until March 31, 2016. It was revealed back in the beginning of February 2015 that AmEx had failed to renegotiate their 16 year contract with CostCo. This left a void of which company would acquire the rights to the lucrative retailer payment market.
What Benefits Will The New Card Have?
Little to nothing is known about what kind of benefits the new CostCo Citi Visa credit card will have at this moment. The new deal was just announced, and it didn't include any cardholder details, but it should be very similar to the type of rewards the TrueEarnings card offered.
TrueEarnings APR and Benefits
- 3% cash back on CostCo fuel purchases
- After spending more than $4,000 in a year cash back becomes 1% for fuel purchases
- 2% cash back at restaurants, hotels, and airline tickets
- 1% cash back on all other purchases
- Receive reward during February and is good only at CostCo
The 3% cash back on fuel purchases is one of the best benefits of the previous credit card. I imagine if the new card doesn't offer something close to the original there will be an uproar on the Internet. Both cards should have no annual fee.
What Will Happen to My Rewards?
All current card members who earn rewards during 2015 will be issued their rewards check during February 2016 and will have until August 2016 to spend it. It is unclear if the Citi cards will use the same kind of check rewards that are issued once a year, or if they intend to switch to a different form of redemption.
This is a big blow to American Express. Not only did they lose the credit card portfolio, but after March 31, 2016 CostCo will no longer accept American Express credit cards as payment.
Oregon Live LLC."What to Expect from CostCo's New Deal with VISA and Citi" Retrieved March 3, 2015.