Warehouse giant will accept any Visa starting June 20, 2016
Dear Cashing In,
I know that Costco is switching credit cards as of June 20. On that date, will Costco accept only Citi Visa? Or will it accept all other kinds of Visa cards in addition to Citi’s? As long as the rewards are greater than the annual fees, then Wells Fargo, Bank of America or Chase Visas should all be acceptable at Costco, right? – Harry
As we have reported, there are big changes in the works regarding Costco and credit cards.
These changes, which take effect on June 20, 2016, affect two major groups: people who hold American Express Costco credit cards, and people who shop at Costco (or who might now shop at Costco).
Let’s break this down a little bit:
1. Those who have American Express Costco cards. The main thing to know here is that the Costco American Express card will be discontinued and will no longer work anywhere beginning June 20, 2016. Citi will send these cardholders new Costco Anywhere Visa cards, which will start working June 20, 2016. Any cash-back rewards accumulated on the old American Express cards will be transferred to the new Citi cards.
2. People who shop at Costco. Beginning June 20, 2016, Costco will accept any Visa card, not just those issued by Citi, according to Costco spokeswoman Ben Akada. It will no longer accept American Express cards, and it will not accept Citi MasterCards.
For people interested in rewards, this opens up a lot of possibilities for shopping at Costco.
However, there are now details of the Costco Anywhere Visa, and it is worth calculating whether to add this card to your portfolio of reward cards. There is no annual fee for the card, but you must be a Costco member (beginning at $55 a year). The rewards in certain categories are pretty generous: 4 percent cash back at gas stations, including Costco (up to $7,000 a year); 3 percent back on restaurants and travel; 2 percent back on Costco purchases; and 1 percent on all else. The cash rewards can be redeemed only at Costco.
This card is worth considering alongside other Visa cards, depending on how much you spend in some of those categories. Four percent on gas is on the high side, and most consumers spend far less than the $7,000 annual cap. Three percent on restaurants and travel is also generous, with no cap.
Of course, since the rewards are in the form of an annual coupon at Costco, this makes sense only if you have a store convenient to you, and you like your rewards in the form of cash back. You must redeem the coupon in person at a U.S. Costco store.
If you prefer your rewards in the form of travel redemptions or frequent flier miles, there will be any number of Visa cards you might use at Costco beginning June 20, 2016 – including, as you mentioned, cards from Wells Fargo, Bank of America, Chase and really any other bank.
I do not see any online applications for the new Citi Costco card. You probably have to apply for it in a store, since Costco membership is a requirement.