What Credit Cards Does Costco Accept?

You’re smart to want to know which credit cards Costco accepts, because it only accepts one: Visa. The largest members-only warehouse club in the country, Costco has an exclusivity deal with Visa, the largest credit network in the world. For many years, Costco stores only accepted American Express cards. But in 2016, the warehouse chain made the switch to Visa. Here’s what you need to know about it.

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How Can You Pay at Costco?

Costco keeps its payment options streamlined, and the rules vary slightly depending on whether you’re shopping in-store or online. In Costco warehouses, Visa is the only major credit card network accepted, which means you can use any Visa-branded credit card, along with Costco’s own co-branded card, to complete your purchase.

This partnership helps Costco keep processing costs low, but it also means shoppers who rely on Mastercard, American Express or Discover will need to choose a different form of payment when browsing the aisles.

You can still shop without a Visa credit card by using a debit card, a Costco Shop Card, cash or a mobile wallet linked to an eligible payment method. Costco also accepts checks from members, and EBT is welcome at most warehouse locations for qualifying food items.

If you prefer shopping online, Costco.com broadens the options by accepting Visa credit cards, Mastercard debit and prepaid cards. With a little planning, most shoppers can find a payment method that fits their wallet, even if their preferred credit card isn’t on the warehouse list.

Why Did Costco Switch to Visa?

Costco entered into a deal with Citi for it to be the issuer of Costco’s credit card. And since the card, Costco Anywhere Visa® Card by Citi, is a Visa, Costco has to accept all Visa cards now.

By switching its sole credit provider from American Express to Visa, Costco expanded its potential client network by millions. While American Express had 23.3 million credit accounts in the U.S. in 2016, Visa had 276 million. That means that at least 250 million more Americans can use their credit cards at Costco.

It also made shopping more flexible for current Costco members. Instead of being locked into using an American Express card, members can now take advantage of the variety of Visa cards available in the marketplace.

What Are Costco’s Visa Card Terms?

Costco’s co-branded credit card, the Costco Anywhere Visa® Card by Citi, is structured to reward members on everyday spending while keeping fees low. The card has no annual fee as long as you maintain an active Costco membership, which serves as the primary cost of carrying it. Cardholders earn elevated cash back on gas and EV charging, travel, dining and Costco purchases, making it a strong option for frequent shoppers and commuters.

The card operates on Visa’s network, so it’s accepted anywhere Visa is, not just at Costco warehouses. Rewards are issued annually as a certificate you can redeem in-store for merchandise or cash, giving members a flexible payoff for their spending.

While the card offers competitive perks, interest rates apply if you carry a balance, so it works best for shoppers who pay off their charges in full. If you’re considering the card, reviewing your spending habits can help you determine whether its rewards structure aligns with your budget and lifestyle.

How Does the Switch to Visa Save Money for Costco Members?

Per their agreement, Visa is the only payment network that Costco will work with. Payment networks are the key to credit card payments. When a credit card is swiped in a store, the transaction information is sent through the credit card processor to the payment network (in this case, Visa).

The network relays the information to the card’s issuing bank (e.g. Citi or Chase), which then approves or denies the transaction based on the cardholder’s available credit. The bank sends the approval or denial back to the network, which sends it to the processor, then the store. Basically, Visa talks to the customer’s bank on Costco’s behalf, gets the approval, and transmits the funds.

To use the payment network, the merchant must pay an interchange fee, which is a percentage of the charge amount. Typically, this charge is 2% – 3%. By negotiating an exclusivity deal with Visa, though, Costco was able to drastically lower its interchange fees to below 0.5% per transaction.

With such low credit card fees, Costco is able to keep its prices low. It doesn’t have to build credit card fees into its markup, as many of its competitors who pay 3% per transaction might. At Costco and other warehouse stores, the revenue margin is fairly small, because they sell the goods for close to wholesale price. This means that every little bit of savings helps the company – and benefits you by keeping the prices low.

Can You Shop at Costco If You Don’t Have a Visa?

Yes, you can still shop at Costco even if you don’t have a Visa credit card, though you’ll need to use an alternative payment method. Inside the warehouse, Costco accepts debit cards from any network, including Mastercard and Discover, as well as cash, checks from members, EBT for eligible items and Costco Shop Cards. Mobile payment options like Apple Pay, Google Pay and Samsung Pay also work—as long as the underlying card is a Visa or a compatible debit card.

If you prefer shopping online, Costco.com gives you even more flexibility. The website accepts Visa credit cards but also allows Mastercard-branded debit and prepaid cards, making it easier for non-Visa users to complete their orders. With these options, most shoppers can find a way to pay that fits their wallet, even without a Visa credit card.

Can You Shop at Costco If You Don’t Have a Costco Membership?

You can shop at Costco without a membership, but your options are limited. The easiest way is to use a Costco Shop Card, Costco’s version of a gift card, which allows nonmembers to enter the warehouse and make purchases. The catch is that only a member can buy or reload the card, so you’ll need someone with an active membership to pick one up for you.

Another option is to accompany a member on their shopping trip, since Costco allows guests as long as the member pays at checkout. You can also order certain items through Costco’s website without joining, though nonmembers often pay a surcharge on many products. These workarounds can give you access to Costco’s deals, but if you shop frequently, a membership may ultimately be the more convenient and cost-effective choice.

Bottom Line

If you’re thinking about becoming a Costco member in order to save on your grocery bill or you’re an existing member who wants to use your credit card to pay for your purchases, you’ll need to have to Visa card to do so. Costco no longer accepts American Express cards. However you can also pay for your goods with cash or checks or debit cards.

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