The Costco credit card change happened on June 20, 2016. More specifically, that’s when Costco’s switch to Visa from American Express officially took effect, after being announced in February 2015. As a result, Costco went from only taking Amex to exclusively accepting cards on the Visa network.
Costco’s co-branded credit cards changed, too. Before June 2016, they were the Costco True Earnings and True Earnings Business cards from American Express. Now, they’re the Costco Anywhere Visa® Card by Citi and the Costco Anywhere Visa® Business Card by Citi. In addition to all their new sign-ups, Costco had to switch over 11 million people who had their American Express cards.
Costco switched to Visa mainly for business reasons. Though they enjoyed a 17-year exclusive relationship with American Express, eventually they could not negotiate a renewal of the contract with the terms they wanted. So Costco turned to Visa, and the deal they negotiated ended up benefitting both Costco and its shoppers. For starters, far more people have a Visa card than an American Express card. There were 335 million Visa cards in circulation at the end of 2016, compared to 47.5 million American Express cards, according to the networks’ filings with the U.S. Securities and Exchange Commission.
Despite having some initial trouble making the switch, Costco has now settled into the new system. Customers can now use any Visa credit cards and most PIN-based debit/ATM cards at Costco, and the Costco Credit Card has a far better rewards program than its predecessor.
If you’re already a Costco member or are planning to become one (membership is required for the card), the Costco Credit Card is a perk that’s definitely worth taking advantage of. It offers extensive ongoing rewards: 4% cash back on eligible gas (up to $7,000 spent per year), 3% back on restaurants and travel, 2% back on Costco and Costco.com purchases, and 1% back on all other purchases. And aside from the Costco membership costs, the Costco Credit Card charges a $0 annual fee.
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