Costco2You probably have received your new Costco credit card fromCitibank.  Certainly, it’s no secret that starting in June 20, 2016, Costco began accepting the Citibank-issued Visa credit cards.  (Citi will issue a Costco co-branded credit card).  It has not gone smoothly — millions of Costco customers have been inconvenienced by the balky role out, according to a number of new sources.  CBS News called it a disaster.  We wouldn’t go that far, but it certainly hasn’t been smooth. Many customers say their new cards have not yet arrived, and some report problems activating or using their cards or getting access to their accounts online. You are instructed to go to citi.com/CostcoSetup to register the card. However, this website is currently inoperable (as of May 30th).   However, we were able to activate the new Citi card  at this URL, so you may want to try it.  Otherwise, it appears that you may not be able to register this card until June 20th, when the card can finally be used.

Costco’s Facebook page drew hundreds of complaints about the rollout.  Citi’s Twitter feed was also filled with angry Costco customers; others left messages on Costco’s Facebook page.   We tried adding an additional signatory to the card and were, at first, unable.  We tried again the following day and it worked.  (editor’s note:  it’s been 5 days and we’ve not yet received the extra card that we requested)   So Citi’s website integration appears to be pretty gummed up.  Costco knows it has a problem:  it posted on its Facebook page: “”Due to high levels of interest in the Costco Anywhere Card and high volumes of calls from cardholders, callers to Citi should expect longer than desired hold times. Citi is reviewing processes and pulling in additional resources to alleviate hold times. ”  We have called a number of times during the last few weeks and have found hold times of over 20 minutes is not uncommon.  We never got through in less than 15 minutes.   That’s not good!

In addition, it took awhile, but details about the terms of conditions for this new card have finally appeared.   Costco card holders don’t need to reapply for the new Visa credit card;  they will be issued new cards automatically. However, a small number of Costco card holders won’t be approved for a Citi card.   But the number of people affected is likely to be small, given that American Express’ qualifications are some of the highest in the industry.

So what will be the foreign transaction fee?   If you travel to other countries, you don’t want to use this card.  We found  additional details of the new Citibank/Costco deal at the SEC’s database, where you can find an agreement between Costco and Citi.  On page 111, the details of the rewards program are described:

Personal credit card details

No annual fee (you do need Costco membership though)
3% on the first $4,000 of gas, 1% thereafter
2% on travel and at US restaurants
1% on all other purchases including Costco

Business credit card details

No annual fee (you do need Costco membership though)
4% on the first $7,000 of gas, 1% thereafter
2% on travel and at US restaurants
1% on all other purchases including Costco

In other words, it’s pretty close to the  previous AmEx card. There may be some differences regarding exactly how Visa and Amex categorize travel or gas (e.g. 7-Eleven), but the basic reward structure is identical. Even the reward redemption is exactly the same with an annual coupons issued for all the rewards which is redeemable at Costco.

Further information about the cards are available at this Costco link.

If you have an Amex card, there is mention on the AmEx website that there may be an option of product-changing your card to a different Amex card, so you’ll end up with 2 cards if you take up AmEx on their offer.  We’ve not fully evaluated the AmEx credit card offer to Costco customers but there is no compelling to accept it given that there are far more compelling cash-back credit card offers currently in the market.