AmEx CEO Kenneth Chenault said that the deal with Costco no longer made economic sense for the company, nor its shareholders. As a result, the two companies decided to split. However, American Express may be the one hurting.
American Express is certainly making moves to retain some of its Costco clientele. The company has mailed out offers to the current Costco-AmEx members promoting its Blue Cash Everyday Card, according to The Motley Fool. It is American Express’ last-ditch effort to maintain some of its borrowers after the switch is made.
The envelopes going out are informing customers that their Costco-AmEx cards will stop working on June 20. AmEx is also offering current Costco customers perks if they choose to stay with AmEx. The company is advertising on the front of the envelopes going out that customers will receive $250 back as a part of a welcome offer once they spend $1,000 within the first three months.
The new card will not have an annual fee. American Express is also offering a 0 percent annual percentage rate for the first 15 months on all purchases and balance transfers. Credit card users will also receive 3 percent cash back at supermarkets, 2 percent back on gas, 2 percent back at select department stores and 1 percent back on all other purchases.
While these benefits are handsome, they are not as good as the Costco Anywhere Visa Card. The new Visa card will be offering 4 percent back on gas, 3 percent back on travel and restaurants, 2 percent back at Costco or Costco.com and 1 percent back on everything else.
Prior to the switch, Costco credit card customers will receive a new Visa card in the mail. When the retail warehouse opens its doors on Monday, customers will be able to begin to use their new credit cards.
If you decide to accept the new Visa card, you can also open a new American Express account and vice versa. To acquire the new American Express card, you will have to make an inquiry on your credit though (which affects your score). People who are receiving the new Visa card in the mail will simply have their AmEx account balance transferred to the new card.
Keep in mind that Costco customers will no longer be able to swipe American Express cards at Costco beginning next week.
Costco’s switch to Visa will be effective on Monday, June 20. Find more information about the switch here, visit Costco’s website or call for more information.
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Photo: Flickr: Mike Mozart