On Monday, Costco announced a new partnership with Citi and Visa. Starting on April 1, 2016, Costco will begin accepting Visa at its US stores. And Citi, the world’s largest issuer of consumer credit cards, will be the exclusive issuer of Costco’s credit cards.
Although the fine details have yet to be combed out, Costco announced that the “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.” The discount retailer also disclosed that it would provide additional information to members in the upcoming months.
This new partnership came as a shock to many. Currently, the wholesale club retailer has an exclusive agreement with American Express. For 16 years, Costco has accepted only debit cards and Amex for purchases in its stores or at gas stations. And the Costco Amex card offered cardholders generous rewards: 3% cash back for gas, 2% for restaurants and travel, 1% back for everything else, with no annual fee as long as the user was a Costco member. However, despite this long partnership, AmEx and Costco were unable to agree on the terms of a new contract, so Costco moved to major bank issuers,Citi and Visa. Details of the new deal will be available shortly.
Source: CNNMoney
