Posted by William Charles on October 15, 2015
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Published on October 15th, 2015 | by William Charles

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Leaked Letter Regarding Costco, Citi, American Express & Visa Partnerships

A Costco employee has leaked a letter that will be sent out to American Express cardholders and will arrive as early as October 19th, 2015. Here are copies of the memo that was sent to Costco’s, followed by the letter that will be sent to existing cardholders:

Memo & Letters

costco memo

costco letter 1

costco letter2

Our Thoughts

My reading of this letter and F.A.Q is that American Express cardholders will be transitioned automatically to the Citi Visa Costco card around March 31st, 2016. Until that date you’ll be able to use your American Express card, I suspect there will be some overlap where Costco accept both cards that run on the American Express & Visa payment networks to make things easier for customers.

The Citi Costco card will also act as your Costco membership card which is a neat feature as well. Unfortunately it looks like we’ll need to wait until early 2016 to see what the rewards package on this card is.

Given that American Express will lose these Costco cardholders, I think it’s safe to say that they will be offering generous targeted sign up bonuses for their other cards to try and get some retention of those cardholders (in fact we’ve already been seeing these targeted bonuses for Costco cardholders).

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jojo
jojo

so things i bought with amex costco would no longer have extended warranty?

Sarah
Sarah

What I can see from the T&C’s, is that they will accept all visa cards. Will that be the debit cards as well? If yes, that’s great to unload your visa debit cards. I would be buying costco gift cards with them and later, cash out those gift cards (they give you back cash)

Do I have this right?

TechMo
TechMo

Visa/MasterCard Debit cards have always been accepted at Costco, so this would not change. Regarding cashing them out there, I would not recommend abusing that… especially if you value your Costco membership.

Eric
Eric

Are you saying that you purchase Costco Cash cards online and Costco gives you cash for them? Why would they do that?

credit
credit

What kind of retention bonuses? Maybe we should sign up for the amex card now?

FindAWay
FindAWay

You wrote: “The Citi Costco card will also act as your Costco membership card which is a neat feature as well.” But, you know that the current Amex cards already do this, right? It won’t be a new or unique feature.

Kent C
Kent C

Wonder if M/C will be excluded from on-line orders. I know you can currently use Visa to buy on-line gift cards (to meet min spend on a Visa promo) but not sure about MC.

The Value Traveler (@ValueTravelerOz)

Extended warranties, special perks, amex deals — all these I presume will be revamped, and of course, change. I dont think one will know until it gets closer to the date.

anthonyjh21
anthonyjh21

For those who are asking if Costco will accept other payment sources, keep in mind you can use any of the widely accepted payment methods – including Discover – to buy a Costco gift card and just use that in store for your everyday purchases. Obviously I’d prefer to use a credit card for big ticket items and/or that benefit from a warranty. Last year during Q4 I bought over $1,000 in Costco gift cards using Discover and their 5% on online shopping and used them over the next few months for everyday purchases such as milk, bananas etc.

I’ll miss them accepting Amex (well, not so much when AGC aren’t a viable option). More so than them accepting Citi next year. While we don’t know what their definition of generous is, I can’t see it being THAT generous. I mean, the Citi double cash back card gives 2% off all purchases. Is Costco really going to top that? As far as gas is concerned, there’s already 5% off there too. I’m expecting them to perhaps match or come close in certain categories and anything beyond that would be a pleasant surprise.

Ben
Ben

My concern is how the transition from Amex to Citi looks on a credit report. Will look like a new account or the same one? My Amex Costco is one of my oldest cards (12+ years), so I don’t want it closed; I’d rather it be converted to some other Amex.

Chuck

Interesting question

Bill
Bill

If Citi’s track record of converting various private label cards, such as the recent Best Buy card portfolio is any indication, Citi will retain the original open date.
In most cases the old account remains on the report, indicating it was transferred. In this case, Amex is in control of that portion of the report update.

Greg N
Greg N

@ Ben – same question. I’ve had my Amex Costco card for about 15 years, so definitely hope I can retain that history.

Greg N
Greg N

I saw someone commented on Gary’s blog that they talked to Amex customer service and were told all the Costco Amex cards were going to be converted to Blue Cash in January. If that’s really the case, I might want to apply for it now to get the sign up bonus since as an existing cardholder I would probably be ineligible for it after the conversion. Right now it’s $250 after $1k spend, which isn’t the greatest bonus ever, but better than not getting $250.

R Tanner
R Tanner

This is extremely disappointing. Given my experience with Citi’s utterly crappy customer service vs very good support from Amex, I’ll have to see how this pans out. I’m not optimistic.

toknowjoyman
toknowjoyman

As a new costco member with a limited credit file, would I still be able to apply and be accepted for a costco amex card?

Need2know
Need2know

So I have been an Amex user for a while now but if I apply for the Costco Amex now and it transistions to CITI that would give me yet another established line of history? Essentially being a member of Citi the same amount of time?

anthonyjh21
anthonyjh21

I doubt this is how it will play out. While it’s still hearsay until anything is definitive, I can’t see our Costco Amex being converted to Citi all while retaining age of account. There’s the possibility Amex will do a product change for us but again not likely, as they’re pushing the blue cash product line pretty hard and trying to get people to jump ship.

Right now my Costco card is a sinking ship that I’m really not happy I’m sitting in because it’s eating up a slot in my Amex 4 card limit portfolio. I’m going to stick it out another 1-2 months to see if find out more. Either way, I won’t be getting the Costco Citi Card. Even if they offer no additional hard pull it’s not worth it, The Costco Amex benefits are crap (you can get better across the board with other no AF Amex cards) and the new Citi version is basically a carbon copy of the current rewards.

harleycomic
harleycomic

I’ve have call Amex and citi bank and I’ll I get is the run around

Kim
Kim

Your credit will be hit twice. Amex confirmed a re-check of your credit for its new card, and you will get another hit if you choose CitiBank. Not to mention a hit if you choose to close your Amex card. With a college student in NY, I’d rather use my current miles Visa at Costco and have a basic membership, to get him free airfare to/from Seattle. Too many credit cards/checks is problematic.

anthonyjh21
anthonyjh21

This just isn’t true — at least yet. Citi and Amex don’t even have the details ironed out so it only makes sense that we are still in the dark. We’re waiting on the domino to fall, in this case being whether or not Citi buys the portfolio from Amex.

Until we get actual facts it’s all just speculation. Either way, I don’t believe Citi will do a hard pull for anyone wanting to maintain a Costco cc.

Kurt Berhang
Kurt Berhang

My concern is if they cancel the Costco card, it would result in my credit utilization ratio going up substantially without any additional credit being used by me. I believe this is actually worse than a hard pull.

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