Citi to Ship New Costco Cards in May 

Costco and American Express announced end of 16-year relationship last year

Costco shoppers will soon get their new plastic.

Citigroup Inc. said on Friday that it will start mailing its new Costco Wholesale Corp. co-branded credit cards to members of the warehouse club in May as Costco prepares to officially end its 16-year relationship with American Express Co.

Citigroup also released details of its rewards program for the cards.

Current Costco cardholders don’t need to apply for the new card, called Costco Anywhere, which will also be promoted inside the warehouse club, a Citigroup spokeswoman said. Cardholders can start using the new Costco plastic on June 20, when the AmEx-Costco cards will automatically be canceled.

“We are committed to ensuring a smooth transition for cardmembers,” said Jud Linville,who runs Citi’s card business.

Cash rewards that customers have earned on the Costco-Amex card will be automatically transferred to the new card, according to Citigroup. Other AmEx-related rewards won’t be transferred to the new card.

The Citi-Costco card offers some richer benefits than the AmEx version. Among other perks, Citi-Costco cardholders will get 4% cash back on up to $7,000 worth of gasoline purchases a year. The AmEx card provided 3% at gas stations, up to $4.000 a year.

The Citi-Costco card will also give 3% cash back on purchases at restaurants compared with 2% on the AmEx-Costco card.

AmEx last year announced that its partnership with Costco, in which only AmEx credit cards were accepted at the warehouse club, would end in 2016. Costco later struck a deal for a new card that would be issued by Citigroup and processed on the Visa Inc. network.

As part of the shift, Costco will now start accepting any Visa-branded credit card.

Citigroup also recently agreed to buy the Costco credit-card portfolio from AmEx, a deal that is expected to be completed in June. At that time, Citi will start providing information about how new customers can apply for its new Costco card.

Costco represented a big chunk of spending on AmEx cards, accounting for one of every 10 AmEx cards in circulation.

Source: WSJ

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