Costco's Less-Than-Smooth Switch from AmEx to Citi Visa Riles Customers

On Monday, Costco’s swtich from American Express to Citi Visa officially got underway, and so did a steady stream of customer complaints on Costco’s Facebook page.

Visa has become the card of choice for the budget retailer, a business decision that ended a 16-year partnership with American Express. But the switchover has been a major disruption for loyal Costco shoppers. With the switch, customers who earn rewards through a Costco co-branded credit card will need to use the Costco Anywhere Visa – instead of the TrueEarnings American Express Costco card.
But issues have come up with some Costco members not getting their new Costco Visa credit card in the mail or some seeing delays in getting their new cards activated. As of Monday, the TrueEarnings American Express Costco card – and any other non-Visa credit or debit cards – can no longer be used in Costco.
Here’s a sampling of complaints on Costco’s Facebook page:

  • “Why didn’t costco do the transition one state at a time to avoid all the problems? Not a well-thought-out transition.”
  • “This card switch has been a debacle. Not only did your new partner not send me a new card, I’ve been on hold with them for 55 minutes.”

Citi has struggled to keep up with questions and complaints from customers about the switchover. Costco has 81 million members worldwide.
Posted another customer: “I have spent over ten hours – over the last 4 weeks – on the phone trying to find out where my new card is, and I still can’t get a straight answer.”
Some complaints are also being posted on Citi’s Facebook page, with Citi representatives reaching out to individual costumers to try and resolve issues.
Says one Citi rep on Facebook: “We apologize for the inconvenience. We are working hard to handle all customer calls and the response by customers activating their new cards has been significant.”
In February 2015, American Express said that it had to end its exclusive co-branding agreement with Costco because it could not agree to a new deal that made better economic sense. Citi announced in March that Costco AmEx holders won’t lose any of the cash back rewards they’ve already earned from their Costco card.
Once Costco and Citi iron out the switchover, customers should enjoy significant rewards: Citi says you will earn:
4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter
3% cash back on restaurant and eligible travel purchases worldwide
2% cash back on all other purchases from Costco and
1% cash back on all other purchases

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