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If you were one of the 11 million people with Costco’s last exclusive credit card (the American Express one) then you probably received the new Citi Anywhere Visa Card in the mail sometime in the last couple months. The warehouse club tried to make the transition as smooth as possible after cutting ties with Amex and signing a new deal with Citi. So if you had debt on the Amex card, it was automatically transferred over to the Citi card. The plan seemed sound, but the rollout hit a few snags (e.g., the cards did not get to customers as efficiently as planned, and then most recently an email was sent out that falsely told some customers that their card had been cancelled, while giving them information about another customer’s card). The snafus may have given you second thoughts about Citi’s new option. That’s why we wanted to offer up an in-depth review. We’ll look at the rewards included with the card and how they compare with similar cards. Hopefully this will help you decide whether or not this card is right for you.
One of the biggest complaints we’ve heard about the Costco Citi Anywhere Visa Card (www.costco.com/credit-card.html, www.citicards.com/Costco) is that it was forced on a consumer base happy with what they already had. For years, the TrueEarnings Card from Costco and American Express was the best rewards card without an annual fee. It gave you multiple percentage points back on major purchases, including gasoline. It helped redefine what the customer expected out of a reward card.
Sure, other cards introduced since the TrueEarnings Card’s inception have outreached what it offered, but not by enough to justify the hassle of switching cards. We just wanted to be left alone. But when big businesses reevaluate partnerships, the top priority is rarely customer satisfaction. At the end of the day, Citi was willing to take less of a cut than American Express, and that’s what mattered most to Costco. So they made the switch and forced a change on millions of customers who probably would have rather not have had to deal with it.
To make matters worse, the transition was anything but smooth. For many customers, the new cards didn’t arrive on time. Then, even if they got hold of a card, it was unusable because of issues with the online account system. Glitch after unfortunate glitch quickly labeled the Amex to Citi transition as a disaster. Or at the very least, an annoyance.
But the past is past. The Amex card is gone. We’re not reviewing the Citi card as a replacement for the old Amex card. We’re asking if the card can stand on its own now that the dust has settled. Well, can it?
Here’s how the rewards work on the new Costco Visa card:
That’s actually pretty good. If you had the old Amex Costco card you probably wondered why you didn’t get any extra cash back on Costco purchases. It was a curious omission to the rewards plan to be sure. One that’s been addressed by the new Citi card.
That 4-percent back on gas purchases is unheard of for credit cards without an annual fee and without rotating categories. Most of the time, when you see a card offering more than 3-percent back on something, the reward is part of a rotating category. So for most of the year you might only be getting 1-percent back on those products or services. For customers who think it’s a hassle to keep track of rotating rewards, a standard cashback option on a regular purchase like gas is a no-brainer.
Onto the entertainment rewards. Unless you’re an Elite Yelper, chances are you won’t actually make too much on 3-percent back on restaurant purchases. So this probably shouldn’t be your main focus when choosing between credit cards. But it’s a reward if you happen to end up with the card.
That 3-percent back on travel can’t match the benefit of using a miles card. If you play the miles game right, they’ll be worth a lot more than 3-percent of what you paid for the tickets. To a lesser extent, hotel cards sometimes make more sense than cashback travel cards.
Lastly, getting 1-percent back on “all other” purchases is pretty standard among rewards cards these days. So what you’re really getting here is a great gas rewards card with the added bonus of getting an extra percentage point back for Costco purchases. That’s not bad, but you’ll probably want to supplement it with a travel card that gets you miles.
Here’s a look at some of the perks you’re privy to when you use the card:
If you pressed me for the best perk associated with this card, then I’d say it’s not about what you get but what you don’t have to give – an annual fee. This is a premium card with elite perks, but you don’t have to pay for it because it’s included with your Costco membership. Another card with these kinds of perks could easily set you back $95 a year.
As far as I’ve seen, there’s no special offer tied to signing up for this card. I think that’s one of the biggest problems with it. Usually when you get a new credit card, it comes with some kind of bonus offer for signing up. I’ve seen many for upwards of $300 cash back, free hotel nights, free miles, and other nice benefits. But for the 11 million people who were forced into the new Citi card, none benefited from an introductory offer. That’s almost like stealing.
I get it. American Express is the premier credit card experience. My dad used the American Express Green Card card to pay for everything when I was a kid. I didn’t feel like an adult until I had one in my wallet. Then Costco took it away from me and told me I had to use a Citi card instead.
My first reaction was to go to AmericanExpress.com and check out the other Amex cards. I was drawn to the Green Card for obvious reasons. But I just couldn’t stomach paying an annual fee for a card that only offers 1-percent back on purchases. I still haven’t decided on a replacement.
If you want an American Express card, then you can definitely apply for one. You just won’t be able to use it at Costco anymore. They only accept Visa cards. (Also, they’re getting stricter about only letting the actual club member pay for the groceries, so make sure you have a Visa on you when you’re checking out, because even your spouse won’t be able to pay unless he/she is on your membership.)
I really, really doubt it. This has been a PR nightmare for the retailer. I bet they stick with Citi for a long, long time. So you shouldn’t have to worry about having to switch over to a different card after you get this one.
The Citi Costco Visa Anywhere Card is getting torn apart by user reviews on few different major credit card review sites. This isn’t too surprising. The issues with the rollout made a lot of customers very mad. Some chose to vent their anger through a user review of the card.
Does this mean we should discount those reviews? Maybe. When a restaurant or business gets caught up in a major PR disaster, Yelp will usually monitor the inevitable onslaught of negative reviews geared toward that company. So if the delay of the card caused users to post thousands of bad reviews, maybe now that the card is out those reviews should be updated. But how many of these people are going to go back and change their reviews? Not many.
Some customers are really upset about the missteps Costco took when rolling out the new card. So much so that they’ve decided to cancel their membership and start shopping at Sam’s Club instead. (I checked and my local Sam’s Club is a mile farther away than Costco, so I decided to just stay put at Costco for now.) If you do make the switch, you might want to take advantage of the Sam’s Club MasterCard.
This card gets you 5-percent back on gas (on the first $6,000 you spend on gas per year). That’s one percent more than you get from the Costco card. It also has the 3-percent back on dining and travel, and it doesn’t require an annual fee. The downside is you’ll only get 1-percent back on Sam’s Club purchases.
If you want the best bang for your buck, though, the My BJ’s Perks Plus MasterCard probably has the top benefits for a warehouse club credit card. The rewards include 10-cents off every gallon of gas you buy at BJ’s Gas, 3-percent back on BJ’s in-club and BJs.com purchases, 2-percent back on restaurants, 1-percent back everywhere else, and having the card knocks the price of your annual membership down by $10. There’s also a BJ’s Perks Elite option that’ll get you 5-percent back on BJ’s purchases and $25 off your membership, but this card includes a $100 annual fee. Of course, the main limiting factor of these cards is actually having a BJ’s Warehouse in your area.
The Costco Citi Anywhere Visa Credit Card is a good credit card. Its top benefit is probably that it provides generous rewards on gasoline purchases. I’d recommend pairing it with another credit card that includes rewards in other categories, such as travel.
Like with all credit cards, you should try to pay your balance back in full every month. The rewards don’t mean much if you have to pay interest on credit card debt. This card has an APR of around 15.49-percent (it varies based on the Prime Rate), which is on par with other warehouse club cards but about 10-percent better than many other store cards. So any money you hope to make off rewards will quickly vanish if you carry over a balance each month.
If you have more questions about the credit card, you should probably reach out to Citi or Costco because we wrote down just about everything we know already. We hope it helped.