What Credit Cards Does Costco Take

Costco is one of the most popular warehouse clubs which has 500 of its 740 branches in the United States. Low rates and voluminous products of the company help both family and business.

If you’re most frustrated by the expectation of an “Out of Stock” sign, there is another issue that will take you away from the guard: They cannot accept your credit card at checkout, because in 2016, Costco changed its credit card transactions.

So, what credit card does Costco take? You will find a lot of it in this post. Let’s read carefully.

What Credit Card Does Costco Take (At Stores)?

Retailers only accepted American Express credit cards before. But in 2016, Costco signed an agreement with Visa and now they only accept credit card payments on the Visa network.

You cannot pay with American Express, MasterCard, and Discover credit cards at Costco.

But you can pay through mobile payment apps like Apple Pay, Google Pay, and Samsung Pay or with cash, debit card, a Costco Shop Card, personal or business check, a traveler’s check, an EBT card.

Costco Gas Stations only accept Visa credit cards. These stations do not accept cash, so if you do not have a Visa credit card, you can use a debit card or Costco Shop Card to pay for your purchases.

The rules for web stores and apps are a little different here.

What Credit Card Does Costco Take Online?

As we mentioned earlier, Visa is Costco’s only credit card network. If you use a website or mobile app, you can use a Mastercard credit card, Discover cards to pay for your purchases.

The two payment modes are also available such as Debit Card and Costco Shop Card. Whereas, American Express credit cards are not accepted on online portals or apps.

Why Did The Retailer Switch To Visa?

Costco struck entered into an agreement with American Express in 1999 to accept the cards only in exchange for a lower interchange fee.

Earlier, only the Discover card was accepted at Costco so the switch to AmEx with a more extensive member base there was smarter.

When you swipe a card in a store, there is a fee payable to the merchant called interchange fee and it is usually between 2% and 3%.

Costco’s agreement with American Express has reduced the fee to 0.6%, much lower than the standard interchange fee. But when the deal was terminated, the retailer asked AmEx to reduce the interchange fee by 0.4%.

In June 2016, the merchant made a deal with Visa which has the largest user base in the world.

American Express had a user base of 23.3 million credit accounts at the time but Visa had a base of 276 million users, beating its opponent by a long shot.

The agreement with Visa not only made Costco’s products more accessible to customers but also reduced interchange fees, which would save customers more money.

Does The Move To Visa Save Costco Members Money?

Yes. Most of these merchants are required to pay an interchange fee of between 2% and 3%, so they cannot offer the savings Costco offers.

The exclusivity deal with Visa lowers Costco’s exchange fees and the low credit card fees helps to keep the prices of products low.

The company does not have to incur credit card fees in the markup of products that most retailers do. Earnings limits are low and consumers get their hands on goods for close-to-wholesale prices.

The Costco Visa Card

The company is partnered with Citi to give the Costco credit card. The Costco Visa Card is available for no annual fee to Costco members, which is a huge bonus. It also offers a better reward than the credit cards, which includes a 4% cashback on up to $7,000 per year on gas purchases, 3% on dining, 2% at Costco, and 1% on everything else.

The reward points can only be redeemed at Costco stores and on Costco.com.

You do not need to have a Costco credit card to receive bonus rewards. Many Visa cards also offer great bonuses and spending an average of $100 per trip to the store, the charges can add up to a nice bonus on any card.

Some other Cards that offer great benefits for grocery shopping include:

  • Chase Freedom Unlimited (5% cashback on grocery store purchases)
  • Wells Fargo Case Wise Visa Card (1.5% cash rewards for every purchase)
  • Chase Freedom (5% cashback on combined purchases in bonus categories)
  • PenFed Power Cash Rewards Visa Signature Card (best for PenFed Honors Advantage members; 2% cashback on every purchase)

Overall, the answer for “What credit card does Costco take?” is: all Visa cards.

But some cards offer much better benefits than others. This is a great card that gives you 2% cashback for every purchase you make at Costco.

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