The renowned wholesale price company Costco (NASDAQ:COST) has been long negotiating for the continuation of American Express (NYSE:AXP) to be the card maker for the exclusive Costco membership cards and deals. Both, Costco and American Express have been trying to work out a deal with each other for the past year, and while nothing had come to avail, Costco decided to go the other way by bringing Citi’s (NYSE:C) visa card on board as a good replacement.
The American Express card provided many benefits for people all across the country in terms of reward points that could be availed to get a reduced rate on customer’s gas fill-up as well. Consumers were able to avail up to three percent of their purchases.
Many people were skeptical about the new deal struck between Costco and Citi, as the previous deal between Costco and American Express allowed some pretty good purchase points that were not available elsewhere. However, the new deal that Costco has struck with Citi has allowed the consumers much better deals than expected.
A major advantage that has come to be useful is the lack of need for any consumer to go through the transition process of changing their cards from an American Express to a Visa Citi. Costco itself would automatically transfer the membership cards.
Costco will mail the transferred and brand new cards to the consumer’s doorstep, without the need for any consumer to change it themselves. Additionally, one of the major advantages of the new tie up is the fact that all points that any consumer has retained with the previous tie up will still be the same and will be retained. There will be no loss of any number of points. Costco has also set up a hotline to address these issues in case there are any shortcomings that preclude a smooth transition.
There will however, be a few problems with the transition, which will be that no American Express cards will be accepted as a payment through card form for any of the Costco outlets. Visa will now be the only form of card payment that can and will be used across the board. The move to not accept American Express cards has made it a bit cumbersome for a few of the customers. Many claim that the move seemed almost vengeful.