The Citi Costco Credit Card: Coming in 2016

citi

For Citi and Visa, it’s great news. For American Express, not so much.

Last month, American Express announced that it was ending its ongoing relationship with Costco, which included a co-branded credit card and merchant acceptance agreements.

The current arrangement is set to end on March 31st, 2016, at which point American Express cards will no longer be accepted at Costco warehouse stores.

Additionally, the Costco-branded Amex credit card will cease to work at that time and cardholders will need to replace it if they still want to earn similar rewards.

My assumption is that you’ll still be able to use Amex credit cards at the Costco.com website regardless of their falling out.

Finally, Use Visa at Costco

Come April 1st, 2016, you’ll be able to use Visa credit cards at Costco, which means a greater number of customers will be able to use plastic at the big box retailer.

Just about everyone has a Visa credit card in their wallet, but American Express is a more specialized group.

That should please Costco customers who tend to be a frugal group of shoppers.

For example, many Chase and Bank of America credit cards are backed by Visa, such as Chase Ink and the BankAmericard Cash Rewards card. You’ll be able to use these at Costco in about a year.

Citi Costco Rewards Card

Perhaps more exciting is the fact that Citi will become the exclusive issuer of Costco’s co-brand credit cards. Yes, cards, per Costco’s press release.

The company says the new Citi cards will provide “generous rewards to Costco members,” along with serving as the Costco membership card.

Whether they’ll provide better rewards than the Costco Amex TrueEarnings card remains to be seen.

That card currently comes with 3% cash back at gas stations, 2% cash back at restaurants and travel, and 1% cash back elsewhere.

What’s odd is that it doesn’t offer any Costco-related cash back or discounts (other than Costco gas and travel purchases). My hope is that the new Citi-backed Costco credit card will actually offer incentives to shop at Costco. Otherwise it’s kind of a strange credit card.

Costco said it would provide more information about the card in coming months to existing cardholders.

The bummer for these cardholders is that they’ll need to apply for a new credit card, which will result in a credit inquiry.

Additionally, it means their existing Costco credit card will no longer provide any benefit to their credit history once it falls off their credit report.

If you’re looking for a sneak peek, perhaps the Capital One Platinum MasterCard that it available exclusively for Costco members in Canada might help.

It too offers the 3-2-1 cash back rewards structure that the TrueEarnings card comes with (albeit with different categories and payouts), and also offers double cash back for the first three months.

Anyway, I’m looking forward to the release of this new credit card and will provide all the details here once they are revealed.

Stay tuned! We now know the features of the new cards!

Read more: What credit cards does Costco accept?

Author: Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

1 thought on “The Citi Costco Credit Card: Coming in 2016”

  1. Glad Costco made the switch. Never made sense to partner a fancy credit card company with a discount wholesaler. Just my 2 cents.

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