Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
That's a problem for Amex on the mass market end. It's also having problems on the high net worth individual end: Bloomberg: Amex is Losing its Millionaires
When Costco switched from Discover to Amex, there weren't free Amex cash reward cards, so this change seemed like a (small) hike in prices at Costco. Now of course, there's Fidelity's 2% Amex card, so again a Costco change in cards may seem like another price hike.
If Costco goes with MasterCard, there's Citibank's double cash card. I don't know of any free 2% cash back Visa cards. At least Discover moved from its "More" card (tiered cash back, up to 1%), to its "It" card (flat 1% back), but a return to Discover would still be a step down in cash rewards.
I'm wondering what will happen with the Costco-branded Amex card.
"Costco cards accounted for 8% of American Express’ billed business and 10% of its cards, according to a note by John Hecht, an analyst at investment banking firm Jefferies."
I believe Costco also makes up 20% of Amex's worldwide loans.
It's a big loss and Amex will not be accepted at Costco as of April 2016.
Well, there is the 2% back on everything, meaning everything, with the Fido amex card. Their service is quite extraordinary and the people exceedingly well-trained. I thought I had heard a few years ago that they had lowered their merchant fees a little to stay competitive.
As an individual I see a problem with dropping one of my longest held credit cards and exchanging it for a new one. The credit score reporting agencies take a dim view of those moves. I have no idea how big an effect this move has but we are often cautioned not to do so in the interest of getting the best score. As for who is hosing who in the Costco v. Amex war I really don't believe that either is primarily concerned with their customers. Bottom line and shareholders yes, but customers, not so much.
I'll probably go back to walking into Costco with a fistful of dollars. I don't care for either Discover or CapOne and I sure don't need another co-branded Visa or MasterCard. Given the length of my daily commute I sure am going to miss that 3% cash back reward on my fuel purchases not to mention the fact that the cost per gallon was often cheaper at Costco than anywhere else as well. Bummer
I doubt you'll need another MC or Visa card if Costco goes with one of those networks. Even Costco's current deal with Amex doesn't require you to use a card issued by Centurion Bank (i.e. Amex's bank). For example, one is free to use Fidelity's 2% Amex card - an even better deal in the store than the Costco-branded Amex card with its 1% rebate on most purchases.
To buy gas, all you need is your Costco card and a credit card on any network that Costco takes at the pump. In NJ, that's any card at all - MC, Visa, Amex, Discover (and probably others). On the left coast, Costco seems to be more picky, but even there any card that operates on the Amex network will do, regardless of whether it is issued by Centurion or anyone else.
Regarding Discover - you might want to take another look at them. They have really improved their service (their TV ads are not mere hype), and they seem to be the only "foreign" card with widespread acceptance in China (though I haven't tested this out yet). With a 1% flat rebate and no foreign transaction fee, the "It" card appears promising as an international travel card. Admittedly, acceptance in first world countries still seems a bit spotty.
Speaking of same subject, what is the best card in term of rebates rates /rewards out there? We have boa visa: ~4.5% gas and ~3.5% for grocery shopping with the Preferred Platinum Client deals. thx
Interesting program. I was aware of BofA's 10% bonus (I have a legacy Schwab, now BofA card, and a legacy eSavings account, no min balance, to qualify), but was not aware of these higher bonuses (50% at the $50K/platinum level).
I'm going to guess that you're meeting the balance requirement with a Merrill Edge account. (The alternative, $50K in BofA earning 0% interest seems a bit excessive to qualify for that bonus.) Anything interesting/useful about Merrill?
The best card for rewards depends on usage. For example, for moderate foreign travel, likely Capital One (1.5% rebate, no foreign fees). There are better cards with annual fees if you do a lot of foreign travel.
Me, I may be calling to have my car jump started more frequently than I put gas in the tank (seriously - a virtue of urban living), so the 3.3% I get on gas with my legacy card is nice, but of little value. I just time my quarterly trips to the pump with Discover's 5% rebate periods. Obviously you road warriors out there have a different take on this.
@msf - I wasn't aware of the other payment options you mentioned as my local outlets (Midwest, MN) have always only allowed the Costco Amex card, cash or personal check. I'll have to check the store policy for any changes the next time I go.
msf mentioned the legacy Schwab card that turned into a BOA. The Schwab was 2% on everything and the money was deposited directly into the brokerage account. I had to drop BOA because of the frequent interruptions due to bad security. Using CapOne 1.5% now.
The Costco gas options likely vary by region, but I haven't surveyed most of the states to check.
I agree with the BofA interruptions - my Fidelity 2% Amex (FIA - a BofA subsidiary) was replaced twice in 2014 because of their lax security (or paranoid security - hard to tell). Am thinking about picking up Citibank's 1%+1% MC as my primary.
If it works well enough, I could even drop the Fidelity Amex altogether - Amex is less widely accepted, and I've still got a legacy "real" Amex card from Fidelity, for those rare situations where "membership has its privileges". As I noted, CapOne seems to be the best card for moderate levels of foreign travel.
Note: any BofA branded card (credit/debit/ATM) will get you free Museum admissions on the first weekend of each month. That's the best reason I've found for keeping some sort of card with BofA.
This credit care program is issued and administered by FIA Card Services. American Express is a federally registered service mark of American Express and is used by the issuer pursuant to a license.
"We", "us", "our" means Bank of America, N.A., also known as FIA Card Services.
When FIA first appeared, I wondered if it stood for Fidelity Investment Account, since the only place I saw it was attached to Fidelity cards. I've since seen it associated with Merrill cards (no surprise there - another BofA company), and it was associated with the Schwab (now BofA) card, which has since been transferred over to BofA-branded administration (i.e. no FIA on the card any more).
Knowing you dig deep into whatever needs research......
I offer the following trinket per Wikipedia:
"On January 1, 2006, MBNA merged with and into Bank of America. MBNA America Bank, National Association, (MBNA) then became a wholly owned subsidiary of Bank of America. On June 10, 2006, MBNA changed its name to FIA Card Services, National Association (FIA), which is not an acronym."
Many mentions of FIA and/or BofA exist related to its formation and court actions; but I have not found any other information regarding the naming.
We dropped our long held bank credit card(s) with the transition to BofA's purchase of MBNA. I am not a "fan" of their business practices; and I do believe "customer service" has a different meaning for some of their efforts. We moved our cc to a local credit union.
After the acquisition of MBNA Corporation (which you probably recognize) by Bank of America, MBNA changed its name to FIA Card Services National Association. FIA Card Services is now a wholly-owned subsidiary of B of A.
According to answers.com: "FIA Card Services is a wholly-owned subsidiary of Bank of America. FIA Card Services processes credit cards on behalf of Bank of America.
The name FIA stands for Financial Institutions Association and dates back to before the company has been acquired by Bank of America."
I must confess that I'm a bit confused by almost all of the above, because when we charge at Costco we simply use our Costco card. That card has no information regarding the actual card issuer other than ""Capital One, N.A.". It works at those Costco's having gas stations also.
Catch, Mark, thanks for the notes. Between the holding companies, the subsidiaries, and the attempts at hiding names and ownership, I'm not sure I'll ever be clear on what, if anything, FIA really stood for. It could be, For Instance, Anything.
I do remember MBNA (formerly Maryland Bank, NA). They had excellent service. Long ago in a galaxy far, far away.
I'm posting this simply to get the subject back at the top of the pile- can anyone please explain what you mean about credit cards at Costco? Are you folks saying that when we charge using our Costco card Amex is/was involved? If so, what does that "Capital One, N.A." on our card mean? I Googled "Capital One" and don't see any connection there to Amex.
I'm not aware of any licensing agreement between Amex and Capital One, but the two are related (via Costco), with one degree of separation.
Capital One had an arrangement with Costo, where you could get a higher interest account at Capital One if you got it through Costco. In turn, Costco has (until 2016) various agreements with Amex (a Costo-branded credit card, Amex is exclusive card accepted by Costco).
So it would not surprise me to find a Capital One NA card connected with Costco. Just for sanity, you are talking about a credit card, not a debit card? (Costco accepts almost any debit card.)
Alternatively, you may have been wandering up north, where Costo now takes MC, and offers a Costco-branded Capital One MC.
I'm just looking at trick answers until I come up with something better
Hi, msf- No, I'm talking about the actual Costco ID card itself, the one with my picture on it. That is the only "credit card" that we use at Costco. That's why I'm confused by all of the other commentary above. Thanks- OJ
Edit/Add: That card does say "Costco Wholesale / Gold Star Member / Credit". It was issued many years ago here in SF.
OJ - Costco made available an AmEx branded card to members through a "True Earnings" program. Use of the card entitled the owner to cash back rewards/rebates based on what they spent and where they spent it some examples of which include 3% on fuel purchases, 2% on restaurants and certain travel expenses and 1% on nearly everywhere else including Costco itself. In reality the card is not much different than any other reward card out there other than it had Costco's name on it and the benefits were a bit more liberal than most. I think that it's safe to say that each made a fair chunk of change off the partnership but now one or the other wants a bigger portion which they can't agree upon. Costco is tough, just ask Apple.
Therefore, since the collaboration between AmEx and Costco is now coming to an end other financial institutions and card companies (i.e.Visa, MasterCard, etc) are vying for the business. It remains to be seen what will happen with the True Earnings rewards (cash back) Costco card members were receiving but It's probably safe to say that the cash won't be flowing through Costco.
The rest of our discussion is peripheral to this main point.
Hi Mark- oh, OK, you're talking about a card just like my Amazon credit card with the "rebate" stuff that is actually a partial return of the extra amounts that are added onto the retail prices so that they can "give back" some of it if you happen to use the right card.
The Costco "charge card" that we have doesn't have any of that fancy stuff- just a plain ol' Costco ID card which doubles as a credit card, useable at Costco only.
OJ - now that you've cleared things up - that you're using a Costco ID card with charge privileges (like a store card), my additional research may be moot. But since I did some digging, there is another possible connection between Capital One and Amex ...
Amex started licensing its name to other banks following a 2004 SC ruling. Citibank, MBNA (where have we heard that name?), and USAA were in the first round of "partners". HSBC and BofA were in the 2nd wave.
In 2011, Capital One acquired HSBC's US (domestic) credit card business. I still haven't connected the dots, but this does present the possibility that Capital One acquired a legacy Amex-branded HSBC credit card. Assuming one was ever issued, and assuming it hadn't been killed by 2011.
OJ, the only point of importance here is that if you use the Costco member card to do your charging, you get nothing extra, that's all. It does not even help your membership fee to stick with it compared with an Amex card. If you use an Amex card, you get its bennies, that's all, whatever they are, in the case of Fido 2% on all Costco purchases. That is going to end in 13 mos or something. Alas. I am sure Costco will enter into some other agreement that is appealing.
It all depends on whether you care about bennies, cashback or whatever they are. I do. I get something like a thou a year back from my Fido Amex card, half of which or more must be via Costco purchases. This apart from Costco's own user rebate check. So my Costco membership is covered, in spades.
@Old_Joe, who sends you the Bill for your Costco charges? I think what they have done is just tied a credit card you have to your ID card. That makes sense since you can only use it at Costco. That would be only for convenience. So I don't think your ID card is an actual credit card.
Comments
Bloomberg: Amex is Losing its Millionaires
When Costco switched from Discover to Amex, there weren't free Amex cash reward cards, so this change seemed like a (small) hike in prices at Costco. Now of course, there's Fidelity's 2% Amex card, so again a Costco change in cards may seem like another price hike.
If Costco goes with MasterCard, there's Citibank's double cash card. I don't know of any free 2% cash back Visa cards. At least Discover moved from its "More" card (tiered cash back, up to 1%), to its "It" card (flat 1% back), but a return to Discover would still be a step down in cash rewards.
I'm wondering what will happen with the Costco-branded Amex card.
I wish Delta would do same but I think AmEx has too big a stake in them.
I believe Costco also makes up 20% of Amex's worldwide loans.
It's a big loss and Amex will not be accepted at Costco as of April 2016.
http://www.businessinsider.com/american-express-jetblue-ending-partnership-2015-2
Would not Pay make this a moot issue with their tokenization?
And another one gone, and another one gone - perhaps too obvious:
Their service is quite extraordinary and the people exceedingly well-trained. I thought I had heard a few years ago that they had lowered their merchant fees a little to stay competitive.
I'll probably go back to walking into Costco with a fistful of dollars. I don't care for either Discover or CapOne and I sure don't need another co-branded Visa or MasterCard. Given the length of my daily commute I sure am going to miss that 3% cash back reward on my fuel purchases not to mention the fact that the cost per gallon was often cheaper at Costco than anywhere else as well. Bummer
To buy gas, all you need is your Costco card and a credit card on any network that Costco takes at the pump. In NJ, that's any card at all - MC, Visa, Amex, Discover (and probably others). On the left coast, Costco seems to be more picky, but even there any card that operates on the Amex network will do, regardless of whether it is issued by Centurion or anyone else.
Regarding Discover - you might want to take another look at them. They have really improved their service (their TV ads are not mere hype), and they seem to be the only "foreign" card with widespread acceptance in China (though I haven't tested this out yet). With a 1% flat rebate and no foreign transaction fee, the "It" card appears promising as an international travel card. Admittedly, acceptance in first world countries still seems a bit spotty.
thx
I'm going to guess that you're meeting the balance requirement with a Merrill Edge account. (The alternative, $50K in BofA earning 0% interest seems a bit excessive to qualify for that bonus.) Anything interesting/useful about Merrill?
The best card for rewards depends on usage. For example, for moderate foreign travel, likely Capital One (1.5% rebate, no foreign fees). There are better cards with annual fees if you do a lot of foreign travel.
Me, I may be calling to have my car jump started more frequently than I put gas in the tank (seriously - a virtue of urban living), so the 3.3% I get on gas with my legacy card is nice, but of little value. I just time my quarterly trips to the pump with Discover's 5% rebate periods. Obviously you road warriors out there
I agree with the BofA interruptions - my Fidelity 2% Amex (FIA - a BofA subsidiary) was replaced twice in 2014 because of their lax security (or paranoid security - hard to tell). Am thinking about picking up Citibank's 1%+1% MC as my primary.
If it works well enough, I could even drop the Fidelity Amex altogether - Amex is less widely accepted, and I've still got a legacy "real" Amex card from Fidelity, for those rare situations where "membership has its privileges". As I noted, CapOne seems to be the best card for moderate levels of foreign travel.
Note: any BofA branded card (credit/debit/ATM) will get you free Museum admissions on the first weekend of each month. That's the best reason I've found for keeping some sort of card with BofA.
Really. I did not know that. I am always looking for usable tie-ins b/w Fido and BoA/ML, as I use nothing else.
I now employ the Fido Amex card for everything because of the 2% into my Fido account, but losing Costco will be a huge reduction.
Still don't know what FIA stands for.
Knowing you dig deep into whatever needs research......
I offer the following trinket per Wikipedia:
"On January 1, 2006, MBNA merged with and into Bank of America. MBNA America Bank, National Association, (MBNA) then became a wholly owned subsidiary of Bank of America. On June 10, 2006, MBNA changed its name to FIA Card Services, National Association (FIA), which is not an acronym."
Many mentions of FIA and/or BofA exist related to its formation and court actions; but I have not found any other information regarding the naming.
We dropped our long held bank credit card(s) with the transition to BofA's purchase of MBNA. I am not a "fan" of their business practices; and I do believe "customer service" has a different meaning for some of their efforts. We moved our cc to a local credit union.
BofA fiddling with cc charges costs $25 million
Regards,
Catch
According to answers.com:
"FIA Card Services is a wholly-owned subsidiary of Bank of America. FIA Card Services processes credit cards on behalf of Bank of America.
The name FIA stands for Financial Institutions Association and dates back to before the company has been acquired by Bank of America."
I do remember MBNA (formerly Maryland Bank, NA). They had excellent service. Long ago in a galaxy far, far away.
Thanks to anyone who knows about this stuff.
Capital One had an arrangement with Costo, where you could get a higher interest account at Capital One if you got it through Costco. In turn, Costco has (until 2016) various agreements with Amex (a Costo-branded credit card, Amex is exclusive card accepted by Costco).
So it would not surprise me to find a Capital One NA card connected with Costco. Just for sanity, you are talking about a credit card, not a debit card? (Costco accepts almost any debit card.)
Alternatively, you may have been wandering up north, where Costo now takes MC, and offers a Costco-branded Capital One MC.
I'm just looking at trick answers until I come up with something better
Edit/Add: That card does say "Costco Wholesale / Gold Star Member / Credit". It was issued many years ago here in SF.
Therefore, since the collaboration between AmEx and Costco is now coming to an end other financial institutions and card companies (i.e.Visa, MasterCard, etc) are vying for the business. It remains to be seen what will happen with the True Earnings rewards (cash back) Costco card members were receiving but It's probably safe to say that the cash won't be flowing through Costco.
The rest of our discussion is peripheral to this main point.
The Costco "charge card" that we have doesn't have any of that fancy stuff- just a plain ol' Costco ID card which doubles as a credit card, useable at Costco only.
Got it- thanks!
Amex started licensing its name to other banks following a 2004 SC ruling. Citibank, MBNA (where have we heard that name?), and USAA were in the first round of "partners". HSBC and BofA were in the 2nd wave.
In 2011, Capital One acquired HSBC's US (domestic) credit card business. I still haven't connected the dots, but this does present the possibility that Capital One acquired a legacy Amex-branded HSBC credit card. Assuming one was ever issued, and assuming it hadn't been killed by 2011.
Ain't marketing grand?
It all depends on whether you care about bennies, cashback or whatever they are. I do. I get something like a thou a year back from my Fido Amex card, half of which or more must be via Costco purchases.
This apart from Costco's own user rebate check.
So my Costco membership is covered, in spades.