Chip Lupo, Credit Card Writer
@CLoop
Costco pays Visa an interchange fee of around 0.4% for each Visa credit card transaction at Costco stores. Costco struck a deal with Visa for this greatly reduced interchange fee in 2016, and the membership warehouse club agreed to accept only Visa cards at its stores in exchange.
By partnering exclusively with Visa and negotiating a low interchange fee, Costco can pass extra savings on to its members. Meanwhile, most other merchants still must pay the credit card networks a surcharge of around 2% to 3% of the purchase amount to process credit card transactions.
It’s worth noting that prior to its agreement with Visa, Costco only accepted American Express credit cards at its stores. Costco was paying American Express a 0.6% interchange fee, still considerably lower than the standard interchange fee. Costco ended the deal with American Express after the two sides were unable to negotiate an even lower fee.
People also ask
Is Costco Visa a cash back credit card?
Yes, the Costco Anywhere Visa® Card by Citi is a cash back credit card, which gives 1 - 4% cash back on purchases and has an annual fee of $0. Your cash back rewards are available as an annual rewards certificate after your February billing period closes. You can redeem the certificate for cash or Costco purchases at any … read full answer
show lessIs it hard to get a Costco Credit Card?
Yes, it is hard to get the Costco Anywhere Visa® Card by Citi because it requires excellent credit for approval. Unless your credit score is 750 or higher and you have a lot of income, it will be difficult for you to get approved for the Costco Credit Card.
In order to get the Costco Credit Card, you will … read full answer
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