Costco is teaming up with Visa
ASST. BUSINESS EDITOR
A Costco membership has become a coveted item due to the ability for members to buy food in bulk for a cheap price. For students at the University of San Diego, this is no exception, especially since a Costco location is just five miles away from the school.
One of the benefits of being a Costco member is the ability to use the TrueEarnings Card, a credit card issued by Costco and American Express, that allows members to earn cash back from eligible purchases.
This card, a result of a 16 year partnership between Costco and American Express, is considered a rewards card. Members are able to get up to a three percent cash rebate when they use it.
However, Costco has announced that the partnership will soon end due to disagreements over contract terms. American Express will be replaced by Visa by April 2016. Members with American Express TrueEarnings Cards will have them replaced with co-branded cards from Visa. In addition, Costco will only accept Visa credit cards at their warehouses and gas stations.
News of this switch has been met with generally positive opinion. Visa offers eight different types of student cards, which are offered to and used by college students worldwide. One such user is USD student and Costco member Madison Mascetti, who has shopped at Costco and used their TrueEarnings card for many years.
“Costco’s switch to Visa means that it will definitely gain a lot more customers,” Mascetti said. “I have a Visa and an American Express, but I usually use my Visa since more businesses both here and overseas accept it. American Express, as a result, will start charging inactivity fees if I don’t keep using it. It’s just a cycle that I’d rather just dump my American Express for if it means I don’t have to upkeep both of my cards.”
Mascetti also talked about her experiences as a Costco member and speculated how the switch to Visa may affect her spending.
“I usually go to Costco at least once every three months or so,” Mascetti said. “And I try to spend no more than $200, but sometimes, I end up spending a little too much and pulling my purchase up to $300. It’s pretty bad, but at least the American Express rewards card gives me some money back in rebate. About two or three percent, usually.”
Some students, such as sophomore Katie Johnson, have expressed uncertainty towards the future of using Visa at Costco.
“We don’t know what will come from this,” Johnson said. “I enjoyed the rebate from American Express, because it could sometimes be useful on rainy days. But we have no idea if we’ll get that much, if any, from Visa.”
The deal between Visa and Costco is set to be put into effect on April 1, 2016. It is unknown if the partnership will produce a rewards card like American Express did. However, the company has made it clear that the cards will serve as membership cards and can be used with Visa. accepting businesses worldwide.
USD’s association with Bank of America allows its students access to a large variety of Visa credit cards. This means that students will be able to take advantage of Costco’s new partnership with Visa once it comes into effect. The coveted Costco membership may soon become a common novelty at USD as Costco begins to appeal to a much wider consumer audience than before.