This June, things will change at Costco: the warehouse retailer will change its official, store-endorsed credit card from a Costco-branded American Express card to a Costco-branded Visa card from Citi. We now know that the new cards will start being mailed out in May, and what kinds of rewards users will be able to expect.
The Wall Street Journal reports that if you currently have the AmEx card from Costco, you’ll receive the new Citi Visa card automatically by the time of the June changeover. Your former Costco-connected card should be canceled. Some rewards will transfer over, and some won’t: cash rewards will transfer to users’ accounts at Citi, but rewards that are specific to AmEx will not.
Rewards for some routine purchases will be better with the new card: users will get 4% back on their restaurant purchases instead of 3%, and 4% back on up to $7,000 worth of gasoline purchases per year, instead of 3% back on up to $4,000 worth of gas.
This will be a big blow for AmEx: about 10% of their cards currently in customers’ hands are those Costco-branded ones that will be canceled in just a couple of months. Will Costco customers be fond enough of the card to get their own, non-Costco-branded AmEx accounts?
We’ll find out in June, but in the meantime, AmEx is pursuing a new generation of bulk buyers by partnering with Boxed, a site that offers a curated selection of items in large quantities, shipping them to customers’ homes.
Citi to Ship New Costco Cards in May [Wall Street Journal]