What To Know About Costco's New Credit Card Policy

What To Know About Costco's New Credit Card Policy
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Details of Costco no longer accepting American Express in favor of Visa.

• News: Current Events

Costco and American Express have had a long relationship that required all credit (non-debit) purchases to be made on an American Express branded card. All of that is about to come to an end and not only will you no longer be able to use your American Express card, you'll be forced to use a Visa for all credit purchased.

Here's all of the details:

When Does It Happen?
Costco will keep accepting American Express Cards, as usual, through June 19, 2016. Starting on June 20, 2016 Costco warehouses will stop accepting American Express Cards completely. Instead, they will only accept all Visa cards, cash, checks, debit / ATM cards, EBT, and Costco Cash Cards.

On that same date Costco.com will accept all Visa cards, MasterCard, Discover, debit / ATM cards and Costco Cash Cards.

What Do I Need To Do?
If you're a current American Express card user that's not a Costco co-branded card then nothing needs to be done, you simply can't use your card at Costco anymore starting on June 20. Instead, use a Visa card or any debit style card starting on June 20.

If you have a Costco co-branded American Express card it will stop working completely on June 20 but you can still carry a balance on it. American Express will happily have you apply for a new card but they won't be sending you one automatically.

You will, however, automatically receive a new Citi-Costco Visa Card by the end of May. Follow the directions to activate it when received. Note that your credit history won't be pulled when they send you this new Visa card but it will have a new card number.

What About Costco Gas Stations?
The changes being applied to the Costco warehouses are also being applied to Costco gas stations. So no more American Express at the pump starting on June 20, 2016 at which point you'll instead use any Visa credit card or any ATM / debit card.

What Is The Benefit Costco Rewards Visa?
The benefits on the new Costco Visa are generally better than the Costco American Express card, specifically they are:

  • 4% cashback on eligible gas purchases, even at Costco gas stations. This is limited to $7,000 per year and then it drops to a 1% benefit.

  • 3% cashback on eligible restaurant and travel purchases.

  • 2% cashback on all other Costco warehouse and Costco.com purchases.

  • 1% cashback on everything else.

Why Is Costco Doing This?
Eh, who knows. To give you slightly better rewards? Perhaps. Because Visa is giving them a better deal and charging fewer transaction fees than American Express? Likely.