Costco has announced to mail new co-branded credit cards, Costco Wholesale Corp., to it members of warehouse club in the upcoming month of May. The decision comes after it announced to end its sixteen years’ relationship with American Express Co.
As per information provided by Citigroup spokeswoman, the present Costco cardholders won’t face any sort of obligation by applying for new cards anywhere. The cards will become activated by 20th of June this year alongside cancellation of American Express Costco cards.
“We are committed to ensuring a smooth transition for card members.” –Citi card business manager, Jud Linville
Moreover, customers will be given another gift on availing new card service: the cash rewards attained by previous AXP cards would get transferred to the new card – automatically. However, rest of the AmEx-related rewards won’t be transferred to the new card.
The reason why this transversion took place was primarily because of richer benefits that Citi-Costco could provide its users– surely more than that of American Express’s, obviously. As part of the shift, Costco will now start accepting any Visa-branded credit card (WSJ).
Going into depth, while comparing:
Citi-Costco cardholders will be receiving approx. 4% cash back upto US$ 7,000 worth of gasoline purchases/annual scale. Meanwhile AmEx card provided 3% at gas stations at US$ 4000/annual scale.
On purchases at restaurants, the Citi-Costco card will give 3% cash back in comparison to 2% rate over purchases made through AmEx-Costco card.
Citi will provide information about how new customers can apply for its new Costco card.
Citi is expected to purchase AmEx’s TrueEarnings credit card portfolio by the end of this month.
On a similar note, Consumer Data Industry Association has set the following credit reporting guidelines:
Under current standards, the transfer and account number change is noted in the account description on credit reports, but it won’t affect the average age of users’ accounts or trigger a hard credit inquiry, meaning it shouldn’t affect users’ credit score. Users’ new Costco Citi card and their TrueEarnings Card from Costco and American Express should show up as the same account on their credit report. Such a change does not require users’ permission.