If you cancel a retailer’s membership, can you keep using a credit card issued by them? We analyzed two cases: Amazon Prime and Costco.
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If I cancel my membership to Amazon Prime or Costco, can I continue to use their credit cards?
The Amazon Prime Rewards Visa card can still be used by those Prime members who may decide to cancel the service.
That is not the case for Costco Anywhere Visa Card by Citi cardholders who cancel their Costco membership and may want to continue to use their card.
Read on to learn about each retailer’s fine print in further detail:
If you’re thinking of dropping your Amazon Prime membership now that its price has increased, what happens to your Amazon Prime Rewards Visa Card?
Amazon announced it is boosting the annual Prime membership fee by $20, to $119. The hike took effect for new members on May 11, 2018. Renewals of existing memberships will see the higher price starting June 16, 2018.
The popular Amazon Prime Rewards Visa Signature card, issued by Chase Bank, states that it is exclusively for Prime members when you sign up.
Effects of canceling Prime for Amazon Prime Rewards cardholders
- Chase customer service confirmed that you can continue using the Prime Rewards card, on Amazon and elsewhere, after leaving Prime.
- If you have a balance, you can continue paying that down month-to-month. And the available credit will still show on your credit report, bolstering your credit score.
- The rewards deal for Prime members will no longer be as generous, but it doesn’t go away entirely, according to Amazon.
- Prime members effectively get 5 percent back on eligible Amazon and Whole Foods purchases when they use the card. Rewards amount to 2 percent back at restaurants, gas stations and drugstores, and 1 percent on other purchases.
- For non-Prime members using the card, the reward rate drops to 3 percent at Amazon and Whole Foods. The other categories keep their existing rewards rates.
- These are the same rewards offered by the Amazon Rewards Visa card, also offered by Chase. The card has no fee and doesn’t require a Prime membership.
Canceling Prime while using an Amazon Prime Rewards card
Leaving Prime is not as simple as letting your membership expire and ignoring appeals to renew. Most users of the Prime Rewards card make it their preferred payment method on Amazon. When your current membership expires, Amazon will bill the annual membership fee to your account automatically.
A Chase customer service worker said Amazon has been flexible about reversing the charge for people who intended to quit Prime and got blindsided by the automated renewal.
But to avoid the hassle of a chargeback, log in to your Amazon account, check your Prime expiration date, and quit before the auto-renewal rolls around.
If, that is, membership no longer makes sense for your budget. Before pulling the plug, it’s a good idea to review the benefits you get – or could get if you knew about them – from Prime.
Our reviewer at CreditCards.com crunched the numbers and concluded that Prime benefits still outweigh the costs.
The Amazon Rewards Visa cards offered by Chase are distinct from an Amazon-only store card issued by Synchrony Bank, which has different terms and conditions.
For Synchrony’s Amazon Prime Store Card, the current 5 percent rewards rate for Prime members drops to 0 percent if you quit Prime membership. The card can still be used for Amazon purchases, however, and still provides access to special financing offers.
Canceling Costco membership as a Costco Anywhere Visa cardholder
A question raised by a Costco member brought up the issue of cards linked to retail memberships and the Costco Anywhere Visa Card by Citi.
“I am now a Costco member, but I am going to let my membership expire,” Brian wrote. “If I continue using my Costco Anywhere Visa card, will I be charged a fee?”
There’s no fee, but no card either.
- Citi’s terms and conditions for its Costco Anywhere Visa card contain this line: “We will close your account if you do not maintain a Costco membership.”
- A Citi customer service representative confirmed that Costco cardholders won’t be able to switch to another Citi card should they decide to cancel their card.
- While the card itself has $0 annual fee, Costco membership costs $60 a year, according to the retailer’s website.
- Losing the card will have two consequences that could be painful – on top of not being able to charge purchases with it.
- First, your credit report will show less available credit, which is a negative for your credit score.
- Second, you will have to pay off the balance, if you’re carrying one. Under the Credit CARD Act, you should have a five-year period to pay off the balance and interest, or limits on the increase in your monthly minimum payment.
As with Amazon, leaving Costco is not as simple as letting the membership expire.
“Your Costco membership fee will automatically renew and be charged to your Costco Anywhere Visa Card annually on the first day of your renewal month,” Citi’s terms and conditions state.
Costco members need to actively cancel their membership to avoid the renewal.