Living with credit, New products, Rewards

Credit card changes … and drama at Costco

Jenny Hoff

If you’re a fan of Visa cards, you’ll be happy to know you can now use yours at the three biggest wholesale clubs — Sam’s, BJ’s and Costco. However, with transitions sometimes come controversy, and Costco is going through its share at the moment.

Longtime Costco customers are still waiting to receive their Costco co-branded Citi Visa cards after the chain has transitioned from accepting cards from its previous partner, American Express. Some customers have taken to Costco’s Facebook page, threatening to cancel their memberships or cut up their cards (despite Costco’s reassuring cover photo featuring the motto: Costco + Visa = heart).

I understand Costco shoppers’ frustrations – they now are restricted to using a credit card that they don’t have yet. I experienced something similar last year when I was racing across a Sam’s Club parking lot with a baby in my arms, trying to get to the closest Bank of America, so I could take out cash and pay for my huge cart of perishable groceries waiting for me inside the store.

Only after I had spent an hour roaming Sam’s Club and stocking up for an event did I find out I couldn’t pay for my groceries with my Visa card, the only form of payment I had on me. Thus ensued my race to the bank.

This year, Sam’s Club started accepting all major credit cards, including Visa, so I’ll finally dare to venture in again if I have a need for a package of 20 paper towel rolls. (BJ’s, a wholesaler with stores on the East Coast also accepts all the major credit cards.)

For Costco, however, the change hasn’t been as smooth. Instead of adding more cards to the roster of accepted forms of payment, Costco switched its card partnership from American Express to Visa — meaning the Costco co-branded American Express card (or any AmEx for that matter) is no longer accepted at the store.

This wouldn’t necessarily be a problem, except there have been numerous reports of customers unable to shop because they haven’t received their Costco Anywhere Visa in the mail, or they can’t activate the new card, and they’ve been hard-pressed to get answers. You can check out Costco’s FAQ page dedicated to the card transition if you’re experiencing problems.

The good news is if you have any Visa, you can use it at Costco, so you don’t have to wait on – or even get – a Citi card to go shopping, though the rewards offered by the Citi Costco card are pretty good for regular Costco shoppers. With it, you’ll earn 4 percent cash back on gas purchases, 3 percent back on restaurant and eligible travel spending, 2 percent back on Costco purchases and 1 percent back on everything else.

You can still earn rewards with other Visas at Costco, though. The Chase Freedom Visa card has extended its quarterly offer of 5 percent cash back at all wholesale clubs until the end of the year. And Bank of America’s Cash Rewards card now offers 2 percent cash back at wholesale stores as well as grocery stores. If you want to use a different rewards card for your massive Costco shopping bill, then you can buy a Costco cash card online. Otherwise, you still have the options of debit, cash or check to pay for your groceries there.

Whatever you do, check before you go to your favorite warehouse club, so you don’t end up racing to the nearest bank, hoping your perishables don’t go bad before you get a chance to bring them home.

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  • acardnal

    I don’t see the “problem.” I used my Capital One VISA at COSTCO. Cashback Reward points accumulated accordingly on my VISA card.