Home > Credit Card Reviews > Costco’s New Visa Credit Card: Here’s What We Know

Comments 8 Comments
Advertiser Disclosure


[UPDATE: Some offers mentioned below have expired and/or are no longer available on our site. You can view the current offers from our partners in our credit card marketplace. DISCLOSURE: Cards from our partners are mentioned below.]

Costco on Monday announced agreements with Citi and Visa to replace American Express as the exclusive co-branded credit card issuer and credit card network in its U.S. warehouse stores. The 16-year-old relationship between Costco and American Express expires March 31, 2016, so shoppers won’t begin to experience the effect of this change until next year.

At this point, there’s not a lot of information on what that change will look like.

What We Know

The agreement between Costco and Citi is contingent on Citi purchasing the existing co-branded card accounts — that’s something to be worked out between Citi and American Express. That transaction would mean existing cardholders will have their TrueEarnings Card from Costco and American Express replaced by the co-branded Citi Visa.

“Assuming the portfolio is sold, and hopefully it will be, Citi will just send you a new card,” said Bob Nelson, Costco’s vice president of investor relations. “Any balances will just transfer over to Citi.”

Emily Collins, Citi’s director of consumer public affairs, told Credit.com that Citi is not sharing any more details about the coming card other than it will begin offering the co-branded card beginning April 1, 2016.

Through next March, Costco will continue accepting American Express cards — it’s the exclusive credit card network in Costco warehouses — but come next April, anyone wishing to use a credit card in Costco will need a Visa.

American Express has a larger market share of U.S. credit cards than Citi (12.1% vs. 11.8% in 2013, according to February 2014 figures from The Nilson Report), but Visa accounts for nearly twice the purchase volume of American Express. In 2014, American Express’s U.S. purchase volume (transactions made with an AmEx) was $684 billion. For Visa, it was $1.21 trillion.

What We Don’t Know

Even though you don’t have to have the TrueEarnings Card to use credit at Costco, you still need an American Express if that’s your preferred method of payment. (Costco also accepts cash, check and debit cards in its stores, and it accepts other credit cards online.) Next year, instead of needing an AmEx, you’ll need a Visa, but Visa cards are much more common than AmEx ones.

Citi and Costco haven’t determined the structure of this new rewards card, but the offerings will have to compete with the cards already in your wallet. Nelson knows this, and he said Costco hopes to work with Citi to come up with a card that is not only better than other credit cards but better than other Visa cards consumers may be considering.

“There’s certainly lots of options out there on all kinds of credit cards, so hopefully the offer we have will be very competitive if not better than most out there, so we’ll see,” he said.

It’s also uncertain what the qualification standards for this card will be. You can still apply for a TrueEarnings Card (American Express has not yet announced when it will stop accepting applications), but because the Citi/Costco card doesn’t exist yet, there’s no way to know how hard or easy it will be to get.

Rewards credit cards are generally available to applicants with good or excellent credit and are best used by people who pay their statements in full each month. Rewards cards tend to have higher APRs, making them an expensive financing choice. Again, that’s just how these products tend to work — qualification standards, interest rates, rewards and other terms and conditions haven’t yet been developed for this new card.

Before you apply for a new credit card, no matter what kind it is, you should have an idea of where your credit stands, because you want to apply for credit you have a good chance of receiving. Each credit card issuer has different standards, and you have no way of knowing what credit scoring model they use to evaluate potential borrowers, so the best thing you can do is focus on what tends to affect your credit standing most: payment history and debt use. Make sure you’re paying debts on time and using a very small percentage of your credit card limits, and watch how this affects your credit scores. You can get two credit scores for free every 14 days on Credit.com.

At publishing time, the American Express TrueEarnings Card is offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.

More on Credit Cards:

Image: iStock 

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Bryan Liads

    If my Annual fee for the Amex Card is due prior to the change to Citi will this annual fee carry over to Citi or will I be responsible for another annual fee?

    Also, how do these types of arrangements affect the consumer’s credit? I.e. Will the account history reflect the opening date of when I first opened the AMEX account and be retroactive or will it show this April 1, 2016 date on my credit report once the switch to Citi occurs?

    • Jeanine Skowronski

      You may want to contact the issuer to find out the specifics of how they are going to handle the transition. You should get a letter outlining the new terms and conditions of the card.

      Thank you,


  • anonymous

    Will the balance on the AMEX transfer over to the new Citi Card?

    • http://www.credit.com/ Credit.com Credit Experts

      Check, but typically that would be the case.

  • micadukey

    We can all bet the perks with Citi won’t rival the perks with AMEX. The whole deal is to reduce Costco’s discount rate, so you can be sure Citi’s margin will require them to squeeze out the differences from the consumer.

  • Wynn

    If you are a true earning credit card still, you will get offer from amex for either amex everyday or blue cash everyday. Both of them doesn’t have annual free. I got offer for amex everyday, but I called them up to get blue cash instead. They change it for you without question.

  • http://blog.credit.com/ Kali Geldis

    That’s a good question! AmEx has not released details yet regarding how the card’s terms will change (if they do). We plan on following this story closely, and will be writing more as we get more information.

    Thanks for your question!

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team