Costco to Switch from American Express to MasterCard

American Express already discontinued its credit card that was affiliated with Costco, so I guess it was only a matter of time before Costco stops accepting American Express all-together. The negotiations between American Express and Costco have broken down. In the past, American Express was the only credit card accepted at Costco. But now it seems that they will be switching to MasterCard instead.

This is probably a bigger blow to American Express than to Costco. It might actually benefit Costco because not everyone wants to have an American Express credit card. MasterCard is the big time winner in all this. This opens up a lot of new business for them. Now I am curious to see which financial institution MasterCard might team up with to provide a co-branded credit card with Costco.

As for those who are holding the American Express TrueEarnings credit card that was recently discontinued to new applicants, the credit card will be valid until December 31, 2014. This coincides with the last day that American Express will be accepted at Costco. Starting on January 1, 2015, MasterCard will be accepted at Costco across Canada.

MasterCard actually charges the retailers a lower fee than American Express. It would be interesting to see if Costco decides to pass on the savings to the consumers. Or at the very least, hold off raising the prices of their products. I am actually excited by this move, if done well, it could really benefit the consumers.

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  1. Applications are now live


    Capital One® Platinum MasterCard®

    Exclusively for Costco®* members
    Earn 3% cash back at restaurants, 2% on gas and up to 1% on all other purchases1
    You can get double cash back for 3 months

    Reward yourself.

    Earn cash back virtually everywhere.

    3% on restaurant purchases
    2% on gas purchases
    0.5% on the first $3,000 you spend annually on all other purchases, and 1% after that
    There’s no limit on how much you can earn
    Get your cash back in January as a rebate coupon you can use to shop at Costco3

    You can get double cash back for three months after your account is opened.

    Double up at restaurants and at the pump.
    Earn 6% cash back at restaurants and 4% at gas stations on all your purchases – up to a combined total spend of $1,500 for both during the three-month promotional period.

    And double up virtually everywhere else.
    Earn 1% cash back on the first $3,000 you spend on all other purchases annually, and 2% after that. You’ll earn at these rates up to a total spend of $8,500 during the three-month promotional period.

    Your promotion lasts for up to 3 months.
    Your three-month promotional period starts when your credit application is approved. You’ll earn double cash back until your promotional period expires, or you reach the promotional spend limit within a category – whichever occurs first. After that, you’ll earn cash back at the regular rates set out above.

  2. Just received the letter from Amex. The switch is effective as of October 3rd. It’s so funny how they are trying to spin this as a much better offer than they used to have with Costco!

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