A few weeks ago we told you about the split between Costco and American Express. For 16 years the two companies have maintained an exclusive arrangement which was profitable to both parties.
Amex was the only credit card accepted at Costco locations which gave them exclusive access to Costco’s enormous pool of hungry shoppers. And Costco was able to limit their credit card processing fees and pass those savings along to their customers. Everybody won.
But their failure to come to terms on an extension means that exclusive agreement will come to an end on March 31, 2016. Costco suddenly becoming available is like Kate Upton hitting the open market, and we predicted it would only be a short wait before someone else came along and snapped the warehouse giant up.
Well, we were right. Costco has come to an agreement with Citigroup and Visa which will officially begin on April 1, 2016.
As part of the deal Citi is expected to offer a co-branded Visa card to replace the soon to be defunct Costco TrueEarnings card from American Express. Terms of the new card have not been disclosed yet but you can expect it to be a competitive rewards card that earns extra bonus points when shopping at Costco warehouses.
What do you think of the new deal between Costco, Visa, and Citi? Will it affect the way you shop?