Costco AMEX Update 8/24/2015

[ddemari]

From all accounts, Citi gets the portfolio, in that a Citi card would be given to all current Amex Costco holders (maybe subject to some approval criteria).  The question is how hard Amex tries to "retain" them with a different card.   And so far, the answer seems to be, not much!

^^^Exactly this. At first I thought amex could offer a different product to card holders in replace of the true earnings card. but after doing some reading, it makes sense on why amex is doing this. the idea is you will keep your costco card and invite the idea of a citi visa. since amex sold their portfolio, they don't want anything to do with costco and rather people apply for new products with amex. 

[creditguy]

I was listening to national consumer radio show last week, and the host who is a big costco fan and he was fuming about the new card. He said basically if you have the costco Amex you have to do a HP at Citi and qualify for their new card, there would be no automatic transition. Additionally he said if you wanted a new Amex to replace the costco card you would have to do a HP for a new product. He was upset at Amex for treating their loyal cardholders like garbage, why should Amex who already knows your history with them require you to give up a HP for the privlidge of staying with them. So needless to say he wasn't real happy with Amex. I guess the way I see it is; it's their game and rules we just play it. 

[fury1995]

Pretty certain the whole backdate fiasco was related to Citi acquiring the portfolio and conditioned on Amex to fall in line. Costco prolly had some say so as well being it's co-branded.

I don't see much standing in the way of that and I don't see Citi requiring a new app to retain a Costco revolver of some type.

I'm still planing another 3X CLI on my current TE just before the switch in anticipation of a matching Citi Costco acrd being issued.

[MASTERNC]

Just read my current statement and saw this "Service Message" on the front page.  Maybe this will change, but the wording makes it sound like they won't be trying to keep the accounts open after April 1.

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You will no longer be able to use this American
Express Card for any purchases as early as April 2016 because our Costco
partnership is ending. You can keep using your Card and earning
rewards until that time. Please call 1-888-246-1076 if you need more
information.

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[SunriseEarth]

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@MASTERNC wrote:

Just read my current statement and saw this "Service Message" on the front page.  Maybe this will change, but the wording makes it sound like they won't be trying to keep the accounts open after April 1.

---

You will no longer be able to use this American
Express Card for any purchases as early as April 2016 because our Costco
partnership is ending. You can keep using your Card and earning
rewards until that time. Please call 1-888-246-1076 if you need more
information.

---

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Hmmm.   I'm suprised that didn't say "Costco purchases," but it does indicate that the cards could possibly be open after 4/1, even if the portfolio sale goes through.   Some analysts suggest that it'd be hard to complete a portfolio transition in time for the April date, given its sheer volume.   It would be the largest cobranded portfolio purchase in history.   

[willwar14]

When I go to apply for the card it says this:

so it can be converted to a different card..

[SunriseEarth]

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@willwar14 wrote:

When I go to apply for the card it says this:

so it can be converted to a different card..

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Meaning it could become a Costco Visa (if the portfolio moves to Citi) or it could become another AMEX (if the portfolio stays with AMEX).   This is definitely more open-ended than the words on the statement.   

[joedtx]

Gotta love all the legal loopholes they leave themsselves. Besides if AMEX wants to get creative if their contract requires them to do a credit check hence losing the portofolio/history of a member why not just do a sp on former members just sayin' .

[MASTERNC]

If this one radio host is correct, AMEX will require a HP and new application for any replacement product (I would also imagine backdating wouldn't occur).

http://www.clarkhoward.com/what-costcos-move-away-from-am

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The important thing for you to know is that this transition could lead to two hits against your credit. Citibank will run a hard inquiry on your credit if you want their new card, which makes sense since you'll be a new customer. But as for American Express, they've made a decision that is loco: Amex will offer a new alternative to the Costco American Express, but they will do a hard inquiry on your credit if you want the new card -- even though they already have a detailed credit payment history on you.

Why in the world would they do that? Here's a statement I got directly from an American Express representative:

"A new credit card product has us entering into a new contract with the Card member with potentially different terms, conditions and benefits. The credit check helps ensure we're providing the most appropriate product and services to our customers."

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[SunriseEarth]

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@MASTERNC wrote:

If this one radio host is correct, AMEX will require a HP and new application for any replacement product (I would also imagine backdating wouldn't occur).

http://www.clarkhoward.com/what-costcos-move-away-from-am

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The important thing for you to know is that this transition could lead to two hits against your credit. Citibank will run a hard inquiry on your credit if you want their new card, which makes sense since you'll be a new customer. But as for American Express, they've made a decision that is loco: Amex will offer a new alternative to the Costco American Express, but they will do a hard inquiry on your credit if you want the new card -- even though they already have a detailed credit payment history on you.

Why in the world would they do that? Here's a statement I got directly from an American Express representative:

"A new credit card product has us entering into a new contract with the Card member with potentially different terms, conditions and benefits. The credit check helps ensure we're providing the most appropriate product and services to our customers."

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Yeah, this doesn't seems like a well-sourced article.   If the portfolio is acquired by AMEX, but you wanted to have an AMEX card, you would have to apply for a new one, and apps require HP.   That's a no-brainer.   However, I highly doubt Citi would give an HP to every cardholder in the portfolio.   Most of us have been through a card changing lenders and the new lender doesn't HP and the former lender wants to HP if you apply for another one of their products.

So the host is "correct" in a sense (assuming Citi gets the portfolio), but he's making a mountain out of a molehill.