Costco announced today that they struck a new partnership with Visa and Citi. Costco will accept only Visa-branded cards starting April 1, 2016, and Citi will offer a Citi/Costco partner credit card, similar to the AmEx/Costco product available currently.
A couple of weeks ago it was finalized that the current Costco, American Express agreement will end March 31, 2015. Speculations ensued over who Costco would partner with. Some mentioned the precedent of Costco Canada who also severed ties with AmEx and went on to partner with Mastercard and Capital One. Today it comes to light that US Costco will be partnering with Visa and Citi.
Under the new deal, only Visa cards will be accepted at Costco beginning in April 2016. Citi will offer the Costco partner card which is currently offered by American Express. All Visa cards will be accepted at Costco, no need for the Citi Costco card specifically.
There may be a small overlap period which Amex cards will still be accepted in April 2016. Also, debit card acceptance won’t change with the deal. All Visa and Mastercard debit cards will be accepted, as is the current rule as well. Citi Mastercards won’t be accepted, since only Visa cards will  be accepted. Most Citi cards are Mastercards, but they do have a few Visa-branded cards, and of course the new Citi Costco card will be Visa-branded as well.
No word yet what the reward structure of the new Citi Costco card will be. The company said that details will be made available to members soon.
We’ve written what we think will happen to current AmEx Costco cardholders, though there’s no official word on this from AmEx yet. We think the cards will be converted to Blue Cash cards or Amex Everyday cards. See also, Should You Sign Up For American Express Costco Credit Card Before The Relationship Ends?
We’re seeing a strong push by Citi into strengthening their credit card portfolio, with this Costco deal another step in that direction.
