Costco is teaming up with Citi for a new co-branded Visa credit card program, shortly after dumping a similar agreement with American Express.
Costco, the nation’s 2nd-largest retailer, will start accepting Visa — instead of American Express — at its U.S. stores on April 1, 2016.
The wholesale club retailer has accepted only debit cards and AmEx for purchases in its stores or at its gas stations, although it also accepts Visa and MasterCard for online purchases. For 16 years, American Express has been the only credit card accepted in Costco’s stores
Most retail establishments that take Visa also accept MasterCard — but not Costco. The only credit cards it will accept for store and gas station purchases will be Visa.
Costco will soon provide more details about the new card’s benefits and terms to members.
The Costco Amex card offered card holders 3 percent cash back for gas, 2 percent for restaurants and travel, and 1 percent for other purchases. There was no annual fee as long as the user was a Costco member.
For now, Costco has this to say about benefits: “Once issued, Costco’s co-brand Visa credit card would provide generous rewards to Costco members, serve as the Costco membership card, and would be accepted at Costco locations in the United States and Puerto Rico, as well as all merchants worldwide that accept Visa credit cards.”
The Citi-Visa deal is pending the expected acquisition of the existing co-branded Costco AmEx card portfolio by Citi.
Citi is the world’s largest issuer of consumer credit cards and has co-branded cards with other retailers, including Sears.