Got an Amex Costco credit card? Here's what's changing

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Got an Amex Costco credit card? Here's what's changing


After partnering exclusively with American Express Co. for nearly 17 years to issue co-branded credit cards, Costco Wholesale Corp. is switching to Visa Inc. If you currently own the TrueEarnings® Card from Costco and American Express, here's what's changing and how it may affect you.

How the transition will work

Costco will use Citigroup Inc. as its new provider of co-branded credit cards. Beginning June 20, 2016, Costco will no longer accept the TrueEarnings® Card. In addition to Visa cards, the wholesaler will continue to accept cash, checks, debit/ATM cards, EBT and Costco Cash Cards.

Most people who have the TrueEarnings® Card will automatically receive a replacement card --the Costco Anywhere Visa® Card -- issued by Citibank. However, there is the possibility that some accounts may not be transferred to Citibank. If that happens, American Express will contact the cardholder.

Citi will be mailing out the replacement cards between the end of May 2016 and early June. If you receive one, your credit line and cash-back rewards earned on your TrueEarnings® Card will automatically transfer to the new card. In addition, American Express says that any remaining balances on your TrueEarnings® Card will be transferred to your new card.

Those who wish to remain with American Express will have to apply for a new card.

American Express says that holders of its TrueEarnings® Card who received an Annual Reward Coupon in their February 2016 billing statement can redeem it in person at any Costco in the U.S. or Puerto Rico on or before the Aug. 31, 2016 expiration date.

The Costco Anywhere Visa® Card

Cardholders will likely be delighted to learn that the new Costco Anywhere Visa® Card comes with higher reward rates than the TrueEarnings® Card offered. With the new card, you'll earn:

  • 4 percent back on the first $7,000 in eligible gas purchases each year
  • 3 percent back on restaurant and eligible travel purchases
  • 2 percent back on all other purchases made at Costco and
  • 1 percent back on everything else

In addition, the Costco Anywhere Visa® Card comes with travel benefits, Damage and Theft Protection, and a variety of other perks - and there is no annual fee with your paid Costco membership. You can learn more about the card's benefits, interest rates and fees in the information Citi will mail cardholders in June.

What you'll need to do

While much of the transition will happen automatically, Citi recommends taking the following actions:

Before June 20, 2016:

  • Feel free to continue using your TrueEarnings® Card.
  • When the Costco Anywhere Visa® Card is mailed to you, follow the directions on the card to confirm that you've received it.

Beginning June 20, 2016:

  • Provide your new card information to anywhere you've saved your card information, including at sites that automatically bill your card.
  • Register for online access to manage your account. There, you can set up AutoPay if you'd like your monthly statements to be paid automatically.
  • Feel free to use your Costco Anywhere Visa® Card.
  • Consider destroying your TrueEarnings® Card, as it'll no longer be valid. You don't need to cancel the card.

Protecting your credit score

Normally, getting a new credit card can negatively impact your score at the onset, as it typically results in a hard inquiry and can lower the average age of your accounts.

However, Citi won't need to pull your credit report in order to issue the replacement Visa card, and it might even show up as the same account on your credit report - just with a different card number. If that happens, the switchover may have little impact on your credit.

Costco customers who decide to apply for a new American Express card on their own, though, might see their credit scores drop, as it'll likely result in a hard inquiry on their credit report.

Bottom line

Overall, it seems like Costco is trying to make the transition as seamless as possible, and the new Costco Anywhere Visa® card may get you more cash back than the card it's replacing. If you're affected by the transition, you should take note of your new payment due date and carefully read over the terms and conditions when your replacement card is issued.

About the author: Emmet Pierce is a freelance writer based on the West Coast. He has developed numerous news contacts in the public and private sectors while writing about personal finance, lending, insurance, real estate, health care, technology and science.

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Although I don't have a Costco Amex, I do plan on getting the Visa card.  I also suspect that despite the many angry posts I've seen on this topic, the checkout lines will be as long as ever.

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