Costco replacing Amex with Visa in 2016

[gwynne]

We thought about that at first. However, we are trying to maximize our rewards points for our Disney Visa and didn't want to use our debit card. Even when we do use our debit card, we run it as credit because we get 1% back from our credit union and you can't run your debit card as credit through Costco.

Well, I guess it's a personal preference. Their prices are very competitive on some items. I am more than happy to take the price break on the day I shop.

 

[tasha99]

We have a United Mileage Plus Visa, so this is great news! We will now earn reward miles for the money we spend at Costco!!

Will you be able to use that? I think right now, Costco only takes their own Amex (someone correct me if I'm wrong).

 

[mnrose]

Will you be able to use that? I think right now, Costco only takes their own Amex (someone correct me if I'm wrong).

I can't say with 100% certainty, but I believe I've used my other Amex Card at Costco once or twice. Of course, you get NO cash back (1-3% like I do with the Costco Amex) on those purchases. I expect this new arrangement will be similar. The Citi Visa co branded with Costco will be the one you can use to get rewards but they might accept others. The rewards I get from Amex far exceed those I get from anywhere else.

I'm sure all these details will be made clear as the time comes closer.

I really don't care so long as we get the same/similar deal to what we have now with Amex. In fact, it might make it easier to consolidate our credit cards. I have a Visa now that only gets used when Amex isn't accepted, which is a fair number of places. I may be able to get by with only a single card in the future.

 

[TLSnell1981]

Currently, Costco accepts any AMEX, plus debit cards. My understanding...they will no longer accept AMEX PERIOD, as of 3/16.

I am very disappointed. Costco will lose this customer.

 

[lizabu]

Current.y, Costco accepts any AMRX, plus debit cards. My understanding...they will no longer accept AMEX PERIOD, as of 3/16.

I am very disappointed. Costco will lose this customer.

Yeah, that's it. They only accepted AMEX when they were offering the Costco Amex. Once they switch to Visa that's the only card they will accept.

 

[JanaDee]

Yeah, that's it. They only accepted AMEX when they were offering the Costco Amex. Once they switch to Visa that's the only card they will accept.

The Costco Visa or any Visa?

 

[TLSnell1981]

They will accept any Visa, after 3/16. They will no longer accept any AMEX.

I'm curious, as to how, this will affect membership. Costco accepting AMEX was a huge reason, I preferred them over Sam's Club. Now, Sam's wins out. I can purchase a cash card at Walmart and use it at Sam's...still get my rewards with AMEX

 

[Deb in IA]

Will you be able to use that? I think right now, Costco only takes their own Amex (someone correct me if I'm wrong).

We have been using our non-Costco Amex card for the last two years, since we became members.

Currently, Costco accepts any AMRX, plus debit cards. My understanding...they will no longer accept AMEX PERIOD, as of 3/16.

I am very disappointed. Costco will lose this customer.

Yes, any AMEX.

They will accept any Visa, after 3/16. They will no longer accept any AMEX.

I'm curious, as to how, this will affect membership. Costco accepting AMEX was a huge reason, I preferred them over Sam's Club. Now, Sam's wins out. I can purchase a cash card at Walmart and use it at Sam's...still get my rewards with AMEX

Yeah!

 

[Albort]

They will accept any Visa, after 3/16. They will no longer accept any AMEX.

I'm curious, as to how, this will affect membership. Costco accepting AMEX was a huge reason, I preferred them over Sam's Club. Now, Sam's wins out. I can purchase a cash card at Walmart and use it at Sam's...still get my rewards with AMEX

Kinda ironic sams club used to be an exclusive discover place and costco is/was exclusive for AMEX. Sams club accepts mastercards as well no visas though(another irony! lol).

Also makes me wonder how much of a line will this impact... my bet is more people will now shop at costco.

 

[gwynne]

Yeah, that's it. They only accepted AMEX when they were offering the Costco Amex. Once they switch to Visa that's the only card they will accept.

That isn't true. I've used my non-Costco Amex for furniture at Costco twice. All the press releases I've read about the switch say Visa. Nothing about Only Costco Visa or the like.
The aren't that restrictive. I'm sure folks can use whatever Visa CC they have, as long as it's valid.

 

[NAB]

Yeah here in Canada we switched to Capital One Master Card as of Jan 1. Dealing with costumer service on that card sucks. Amex sent us new cards with no Costco membership on the back. So we can continue to use that card in other places.

 

[lizabu]

That isn't true. I've used my non-Costco Amex for furniture at Costco twice. All the press releases I've read about the switch say Visa. Nothing about Only Costco Visa or the like.
The aren't that restrictive. I'm sure folks can use whatever Visa CC they have, as long as it's valid.

I'm not sure what you're talking about. Obviously they accepted Amex when Amex was their card of choice. They're switching to Visa. Once they do that they will only take visa. They already dropped Amex here in Canada. They have a Costco MasterCard but they will accept any MasterCard just like when they used to accept Amex they would accept any Amex. In the US if they're switching to Visa they're going to have a Costco Visa but they will take any Visa.

 

[Starwind]

And, for purchases on either costco.com or costco.ca, they accept all major credit cards.

 

[AnnaS]

I hope we can use any VISA and not just a special Citi Visa - if that makes any sense. I have always used by debit or written a check. I hate that since I would rather get rewards on my Chase Visa Disney card. If I can use this to make purchases, it will be great since I do not have intentions of opening a credit card with anyone.

 

[bcla]

Currently, Costco accepts any AMRX, plus debit cards. My understanding...they will no longer accept AMEX PERIOD, as of 3/16.

I am very disappointed. Costco will lose this customer.

Why? I don't know of many who rely solely on using AMEX. There are quite a few retailers and restaurants that just won't accept AMEX (with their industry high merchant fee), and almost anyone with AMEX will have Visa/MC as backup.

http://www.nerdwallet.com/blog/tips/rewards-credit-card-tips/retailers-accept-american-express/

The takeaway: the reason that American Express isn’t accepted at all retailers is because of its high swipe fees, compared to other credit cards. AmEx uses these fees to make the bulk of its profits, so its unlikely they’ll lower them anytime soon. However, this doesn’t mean that it’s useless to get an American Express card – consider all your options to figure out which type of plastic is right for you.

Visa/MC have a different model. Visa/MC make the majority of the merchant fees, but the banks make money on revolving credit interest. Some have premium cards that have higher annual fees, but where the user might come out ahead depending on the offers. The banks also have derisive names for those who pay off their balances every month. They're called "30 day wonders", or when they're feeling really ticket off - "deadbeats".

Also - there was a time when Visa and MasterCard were nonprofits. They served as bankers' cooperatives that supported and was actually owned by their for-profit members. That's apparently one reason why both converted to for-profit companies - to avoid the appearance that the banks were effectively price-fixing and doing things against the public interest.

http://www.digitaltransactions.net/news/story/MasterCard_-Five-Years-After-the-IPO

In the five years since it offered its stock to the public, MasterCard Inc., the world’s second-largest card network, has become a more agile competitor, better prepared to meet the challenges of a constantly changing marketplace and economic upheavals, analysts say.

It has evolved from a non-profit association focused almost entirely on the needs of its bank owners to a company that answers to Wall Street and has a more innovative outlook on payments, they say.

Prior to the IPO, MasterCard had 100% bank ownership, making it “an easy target for the legal community to raise false claims that we were an association of co-conspirators, and were sitting around fixing prices and leading to anti-competitive business practices,” says Chris A. McWilton, president, U.S. Markets, MasterCard Worldwide. “We realized to grow a business and to serve our customers when we’re under that much scrutiny and spending so many of our resources defending our ownership structure, that wasn’t the ideal place to be.”

But while the IPO put MasterCard in a better position to defend against antitrust suits, it also opened the way for the organization to compete more effectively.

I've talked to Visa employees, and apparently there are quite a few who were around when they converted. Those employees made a lot of money in stock options.

 

[bcla]

I hope we can use any VISA and not just a special Citi Visa - if that makes any sense. I have always used by debit or written a check. I hate that since I would rather get rewards on my Chase Visa Disney card. If I can use this to make purchases, it will be great since I do not have intentions of opening a credit card with anyone.

The strange thing about this one is that Citi probably issues more MasterCard cards than Visa. As for me, I even remember BankAmericard and Master Charge. That, and thumbing through books of canceled credit card numbers as well as imprinters.

 

[bcwife76]

Yeah here in Canada we switched to Capital One Master Card as of Jan 1. Dealing with costumer service on that card sucks. Amex sent us new cards with no Costco membership on the back. So we can continue to use that card in other places.

Costco Canada accepts any mastercard, it doesn't have to be Capital One. My dh and I actually have Capital One cards already but we hardly ever use it (not sure why we don't cancel it really). We use our Presidents Choice Financial mastercard all the time so I'm thrilled Costco Canada has made this move, because now I have yet another place to earn more PC points too ;-)

 

[mnrose]

I really don't get the affection for Amex. I have had a Costco Amex card for a LONG time....not because of any particular loyalty to Amex, but rather because of the hefty refund I get every year for using it at Costco. LOL. As far as useful credit card, I'd say that my Visa is MUCH more widely accepted and provides the same level of service to me. When Costco switches their card to a Visa, you can bet that I will be switching along with them. It makes me HAPPY to get a Visa because I can use it nearly every single place I shop....same can't be said for Amex, which is why I have a Visa....it's been my back up card.

I love Costco, and would never switch away because of their payment mechanism....unless they switched to only accepting some exotic form of payment (such as gerbil food), I will continue to shop there so long as they are located convenient to me.

 

[TLSnell1981]

Why? I don't know of many who rely solely on using AMEX. There are quite a few retailers and restaurants that just won't accept AMEX (with their industry high merchant fee), and almost anyone with AMEX will have Visa/MC as backup.

.

We have several cards, but use AMEX about 99% of the time...have for many, many years. I receive outstanding customer service and numerous perks. We travel, quite a bit ,and have had great experiences with AMEX. I am a very happy and loyal customer.

I'm not that loyal to Costco. They were a good fit, when they took my card of choice. The 2% membership rebate is okay, but not enough to keep me

 

[bcla]

We have several cards, but use AMEX about 99% of the time...have for many, many years. I receive outstanding customer service and numerous perks. We travel, quite a bit ,and have had great experiences with AMEX. I am a very happy and loyal customer.

I'm not that loyal to Costco. They were a good fit, when they took my card of choice. The 2% membership rebate is okay, but not enough to keep me

The fact is that AMEX isn't that great for retailers given that the have the highest merchant fees in the industry. The rationale behind accepting it is that the average customer is higher income, and merchants that accept it hope to attract higher income customers who might buy higher profit items.

It was well known that Costco secured the deal with AMEX by negotiating probably the lowest merchant fee of any of the retailers they serve. Costco has a low margin business and couldn't afford a 4% fee. It probably wasn't sustainable for AMEX since they have higher costs and don't make as much from interest as banks because of their customer base. Also, there were many merchants that would like to tell their customers to use another card, but the merchant agreement didn't allow it. However, I have had store owners tell me that they would prefer another card or institute minimum purchase, which also violates the merchant agreement. However, a judge just ruled that it violated antitrust laws.

http://www.bloomberg.com/news/artic...feat-compounds-challenges-facing-ceo-chenault
http://www.bloombergview.com/articles/2015-02-23/american-express-gets-dumped-again

AMEX is in a pretty bad position now. Right now they might need to lower merchant fees to keep retailers from dropping them, which in turn might force them to reduce some of the perks, which aren't free. They're in somewhat of a bad position. I'm guessing the deal they had with Costco gave them more market share but wasn't one that made them much.

I really don't worry that much about perks. Chasing perks often means spending more. I used to buy stuff at Costco with cash, because they had what I wanted at prices I liked. If they were cash only I'd buy there.

By the way, you all know how American Express started, right? They were a delivery company merged from three companies. The founders included Henry Wells, William Fargo, and John Butterfield. The first two went on to start another delivery company serving California when AMEX's board declined to expand, although they stayed with AMEX while running another company.