Where Accepts American Express

Share

Mar 18, 2019 How Can You Pay at Costco? As of 2019, the only credit cards Costco accepts are Visa network cards. Costco also accepts cash, checks, debit cards/ATM, Electronic Benefit Transfer (EBT) and Costco Cash Cards. Costco’s change to Visa came as a surprise to many, since the retailer had a deal to accept only American Express cards since 1999.

If you’re thinking about becoming a Costco member, one of the first questions you probably have is what credit cards does Costco accept? Costco is the largest members-only warehouse club in the country, and it 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.

Feb 12, 2018 American Express credit cards have a reputation for being targeted at more affluent shoppers and not being accepted by many shops in the UK. But now Lidl – a supermarket popular with shoppers on the hunt for a bargain – has just started accepting American Express at its checkouts. Discover where you can use your American Express Card for travel, shopping, entertainment, dining, and services. More points, more offers, more yes. See who accepts your Card Amex AU.

Check out the best cash back credit cards.

How Can You Pay at Costco?

As of 2019, the only credit cards Costco accepts are Visa network cards. Costco also accepts cash, checks, debit cards/ATM, Electronic Benefit Transfer (EBT) and Costco Cash Cards.

Costco’s change to Visa came as a surprise to many, since the retailer had a deal to accept only American Express cards since 1999. That was a switch from only accepting Discover cards, which has a much smaller member base than AmEx. The Costco-American Express deal served as a huge boon to both companies, with Costco growing into one of the top three retailers in the world and driving billions of dollars in sales volume to American Express. Then, Costco moved on to an even larger credit network in Visa.

How Does This Affect Costco Members?

Who Accepts American Express

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 now 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.

The Costco Credit Card and Other Visa Cards

Another change that Costco made when it changed credit providers was switching its Costco credit card from the TrueEarnings Card® from Costco and American Express to a new product, the Costco Anywhere Visa® Card by Citi. This new store card is available for no annual fee for Costco members, and offers better rewards than its predecessor. Its bonus points include 4% back on up to $7,000 per year (and 1% thereafter) in eligible gas purchases, 3% back at restaurants, 2% back at Costco and 1% back on everything else. It also has the benefit of being a Visa card, which is accepted at more merchants worldwide than American Express. Reward points are only redeemable at Costco warehouse stores and on Costco.com.

Even members don’t have the Costco Anywhere Visa® Card can benefit from the switch. Many Visa providers have added bonus rewards categories for warehouse stores, meaning you can earn extra cash back or reward points by using your Visa card at Costco – just check your card’s reward categories. Even without extra bonuses at warehouse clubs, members spend over $100 per trip on average and those charges can add up to great bonuses on any rewards credit card.

How the Visa-Costco Partnership Saves Customers Money

Per the new 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.

Other Ways to Pay at Costco

Customers don’t need to have a Visa card to pay for their Costco purchases. In addition to Visa, Costco also accepts cash, checks, debit/ATM, EBT and Costco Cash Cards. Costco gas stations and Costco car washes do not accept cash, checks or EBT.

The 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.

More Money-Saving Tips

Shop around for the best savings account. If you’re saving for short-term financial goals, like buying a new appliance, a savings account that earns interest is a good place to put your money. Online-only banks like Ally and Marcus by Goldman Sachs have some of the best interest rates so you’ll able to put your money to work.
Take control of your assets with the help of a financial advisor. A financial advisor can help you create a budget and craft a financial plan centered on achieving your long-term goals. SmartAsset’s financial advisor matching tool can help you find an advisor to work with to meet your needs. First you’ll answer a series of questions about your situation and your goals. Then the program narrows down thousands of advisors to up to three who meet your needs and are in your area. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while doing much of the hard work for you.

Photo credits: ©iStock.com/slobo, ©iStock.com/PeterPhoto, ©iStock.com/andykatz

Share

If you’ve landed on this page, chances are you’re just as perplexed as a ton of other people as to why American Express isn’t accepted at so many stores. It’s a major credit card company with millions of customers around the world. So what gives? Why can’t those millions of customers use their Amex cards at so many places? Turns out, sometimes accepting American Express just costs too much for merchants to make it worth it.

Check out the best credit cards of this year.

Why So Few Retailers Accept American Express

You may not know this, but merchants have to pay credit card companies a fee in order to accept any credit card. Of course, merchants choose to offer this service because it’s better for their customers and better for business. But for every credit card transaction, they pay an interchange fee to the credit card issuer, costing them money.

All credit card issuers charge a fee, but not all issuers charge the same fee. Because of this set up, merchants can choose which credit cards they want to accept. The different fees often make or break a deal for a merchant. This is why many merchants, especially small businesses, don’t accept American Express. American Express’ interchange fee is just too high.

Providers like Visa and Mastercard charge between 1.5% and 2.5%, while Amex charges merchants between 2.5% and 3.5%. The exact percentage can fluctuate, but American Express still charges over 2.5%. While 2.5% – 3.5% may not seem like a lot, especially compared to Visa’s 1.5% – 2.5%, it can pose a difficulty for smaller businesses. Sometimes that extra 1% or 2% isn’t worth the profit they may or may not gain. Even large retailers that make hundreds of thousands of dollars a day could lose money from constantly paying Amex fees.

Businesses consider a bunch of different factors when deciding whether to accept American Express or not. Often this includes the business’ size, its markups and the number of transactions it makes per day. When merchants forgo American Express, they usually rely on their customers to have another way to pay, whether by Visa, debit card or cash. They’re usually right.

Why Is American Express More Expensive?

So instead of being left out, why doesn’t American Express just lower its fees to match those of its competitors? Well, American Express relies on these fees, and other income streams, to make money. This is a different business model from those of Visa and Mastercard, who make much of their money from interest rates.

American Express does make interest income, but many of its products aren’t designed to generate interest. The company requires cardholders to pay their balance in full each month. Instead, American Express charges high annual fees, which its largely affluent client base can pay. In turn, merchants know whether American Express’ clientele will shop at their store or not which will determine whether they’ll accept Amex or not.

Why Use American Express?

American Express may not be accepted everywhere, but there’s a reason it remains so popular among customers. For one, Amex credit cards can come with incredible rewards. Not only can you earn points, but you can use those points for great rewards like free flights and hotel stays. Plus, depending on your spending habits, the annual fees almost always come out in the wash. As always, just be sure to use your credit card wisely, spending only what you can afford.

As for merchants, it’s entirely up to each merchant whether it want to accept Amex or not. Most of the time, paying the higher fee just isn’t worth it. Either the merchant’s clients don’t use Amex anyway, or the profit it could earn from Amex holders isn’t significant enough. However, it could be worth it to run the numbers or even a trial run. Some small businesses, depending on prices and clientele, can benefit greatly from accepting Amex.

The Takeaway

There’s nothing wrong with already having an American Express card. It might even be your favorite! Just be prepared – if you’re not already – to offer another form of payment at places where your card isn’t accepted. Many Amex cardholders do have a second credit card, whether Visa or Mastercard, as a backup. Of course, you can also use cash or a debit card, whatever works better for you and your finances.

Tips for Choosing the Right Credit Card

So you’ve decided to join the credit card team. Congrats! Getting a credit card is a pretty exciting step in your financial life, especially if it’s your first. But how do you choose your first credit card? Probably the most important part is to make sure the credit card and its features align with your spending habits. If you tend to spend a lot at the grocery store, you would want to look for a cash back credit card with extra grocery store rewards. A card that doesn’t enhance your spending will end up being more of a burden.
Not quite ready for a rewards credit card? No worries. You can easily start off with a secured credit card, which provides, you guessed it, more security in your credit spending. You put down a security deposit which serves as your credit line and collateral should you miss any payments.
When comparing credit cards, you will also want to look at each card’s annual fee and APR. While there are no fee credit cards, there are also a handful of them that do charge some pretty high annual fees. You’ll have to decide whether the rewards and perks those cards offer make the annual fee wholly worth it. Also be sure to take a look at a card’s interest rates. You should be paying each bill in full and on time to avoid interest, but sometimes that’s not always possible. It can lessen the bite if you get a credit card with a lower APR.

Banks That Accept American Express

Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Stomg