Everything You Need to Know About the Costco Credit Card Switch

Costco warehouse

Costco | Justin Sullivan/Getty Images

A friendly reminder to all Costco credit cardholders: It’s time to get your new Costco Anywhere Visa credit card ready to shop at Costco stores and online starting June 20 — the day the bulk retailer officially switches to the new Visa network with issuer Citi. [Update: This story has been revised to reflect that you can also use all Visa credit cards, along with other payment methods, like cash, to shop at Costco stores following the switchover.]

Previously, the TrueEarnings Card from Costco and American Express served as its official credit card; Costco announced it was ending its exclusive partnership with American Express back in March 2015. (Full Disclosure: Citibank and American Express advertise on Credit.com, but that results in no preferential editorial treatment.)

What you need to know

Some of the terms and conditions of the Citi card are similar to American Express. For instance, the new card, like the old one, doesn’t technically carry an annual fee, but you’ll need a Costco membership, which costs at least $59 per year (depending on the type) to qualify. Your new Citi card will serve as your Costco membership card, so anyone currently paying their membership fee with their American Express card can do so with this one.

But there are a few differences.

For instance, Citi’s new Costco card allows cardholders to earn 4% cash back on gas purchases (up to $7,000 per year, then 1% back); 3% back on restaurants and travel purchases; 2% back on Costco and Costco.com purchases and 1% back everywhere else. That improves on the American Express version, which offered 3% cash back on gas (up to $4,000), 2% back on restaurants and travel and 1% back everywhere else.

Any cash back earned on the Citi card is given annually as a rewards coupon redeemable for cash back or merchandise at Costco warehouses. The coupon is included on your February billing statement and expires on December 31 of the year it was issued.

Here’s what to do to prevent any hiccups related to the switch.

1. Make sure you’ve got the new card

A couple make their way toward the entrance of a Costco - Source: Frederic J. Brown/AFP/Getty Images

Costco entrance | Frederic J. Brown/AFP/Getty Images

Citi started sending its Costco Anywhere Visa credit card out to existing TrueEarnings cardholders back in May, so chances are you’ve already received your new plastic in the mail. If you haven’t, you may want to contact the issuer to verify your address and/or have a new one mailed out.

Once you have the new card, you can visit citi.com/CostcoSetup to register your online account.

2. Read the terms & conditions

Full terms and conditions — along with payment due dates and your interest rates — should have come with your new card, so you’ll want to read these carefully to learn if the transfer affects your account. Your interest rates and payment due dates should be similar to your old ones.

Per Citi’s online FAQ sheet: “If the initial letter you received from Citi listed your standard purchase APR as 15.49%, and your current APR for new purchases on your Costco card from American Express is less than this, then you’ll keep your current APR for new purchases made with your Costco Anywhere Visa Card by Citi.”

You can contact a Citi customer service representative with any questions.

3. Check reward balances

Consumer checking rewards balance on computer

Checking rewards balance | Source: iStock

You won’t lose any of the cash back you’ve accrued with the American Express Costco card. Those rewards will automatically be transferred to the new account by June 20. However, you won’t be able to transfer any American Express-specific membership rewards to the new account, so you may want to contact American Express with questions about using those rewards before the official switchover date.

4. Take steps to avoid missing payments

Account balances are slated to carry over from card to card. But you’ll need to pay any bills you receive from American Express beforehand. And you’ll need to set up automatic bill pay on the new account if you wish to make monthly payments from a checking account. Forgetting this could result in missed payments, which could wind up affecting your credit score. (You can see where your credit currently stands by viewing your two free scores each month on Credit.com.)

Remember to update account information with any merchant you were paying via automatic or recurring payments linked to the old American Express card. You don’t want any unpaid accounts to wind up in collections and damage your credit.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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