Thursday, August 11, 2016

A fan of the new Costco Anywhere Visa Card runs into a big Catch-22

Banners touting the new Visa credit card at the Costco Wholesale Business Center in Hackensack emphasize the bigger cash rewards, compared to the old American Express card, but don't mention Visa's foreign-currency transaction fee.


The transition to a Visa credit card from American Express hasn't been smooth for some Costco Wholesale members whose howls of protest are all over Facebook.

We received our new Visa cards long before the changeover on June 20, and I had absolutely no problem when I purchased a few items at the Costco Wholesale Business Center in Hackensack on that day.

I liked the new card, because it offered more cash back than the American Express Card on purchases at Costco, including gasoline, as well as on restaurant meals and travel, and at other stores.

But then I received a statement from Citi that one of my Costco accounts was past due.

I was hit with an interest charge of $17.84 and a foreign-transaction fee of 50 cents for fast-food restaurant meals my wife inadvertently paid for with the Costco Anywhere Visa Card while we were on vacation in Montreal.


I wasn't able to reach anyone at Citi on the phone, but in a message, wrote I had never received a statement, and asked for the interest charge to be reversed.

Citi declined, but agreed to send me the statement I never received.

And what I got in the mail was a statement from my old American Express TrueEarnings Card for $885.96 with a due date of July 5.

Here is the Catch-22:

I had that American Express account set up for auto pay, as I do for all my credit cards, and paperless billing.

Usually, I would get an email from American Express, saying my statement was ready to view on my computer, and I would print it out and put the payment coupon in my checkbook to deduct it on the due day.

This time, I didn't get an email from American Express, and my payment was never deducted on July 5.

The Costco Wholesale Business Center in Hackensack. A couple of weeks ago, I overheard two members tell an employee they never received their new Visa credit cards, but had received statements showing someone stole them and made purchases.

$677M profit

I read comments from a lot of Costco members on Facebook about what great service American Express provides.

I agreed with them, but this time American Express really let me down.

Then, I read a brief story in my daily newspaper, reporting American Express saw its second-quarter profit jump by 37 percent, "helped by the sale of its Costco credit card portfolio...."

"AmEx sold the Costco portfolio to Citigroup, providing a one-time after-tax gain of $677 million for the April-June quarter.

"The credit card company said it earned $2.02 billion in the period or $2.10 per share."

So, AmEx is laughing all the way to the bank at the expense of some Costco members.

'Global acceptance'

In the July 2016 edition of Costco Connection magazine, company officials say they chose Citi because it is the world's largest credit-card issuer.

The card, one Costco executive said, has "global acceptance, great cash-back opportunities and benefits such as travel and purchase protection to provide peace of mind."

But the word "anywhere" in the name of the new credit card is an exaggeration:

Costco overlooked the 3% foreign-currency transaction fee that makes the Anywhere Visa Card a poor choice when outside the United States.

American Express also charges a foreign-currency transaction fee, so the Visa card is no improvement there.

In another Catch-22, Citi's website says the foreign-transaction fee doesn't include purchases at Costco worldwide.

But when I visited two Costco warehouses in Montreal in July, they wouldn't accept my Costco Visa card or even a Visa-branded bank debit card.

I had to use a MasterCard, and pay a currency-transaction fee.

Will close account

Now, I've added my wife as an authorized user on my Costco Visa Business account, allowing me to close our second Costco account.

But when I was finally able to reach a customer service representative at Citi on Monday afternoon, I was told to wait to close the account until after I receive my cash-back coupon in February.

And once I explained that I never received my last American Express statement, she said she would reverse the interest charges I paid.

September update

A few weeks after I posted this, the credit still had not shown up on my statement.

So, I called again last week, and was assured I would get a refund of the $17.84 in interest.

And a week or so later, I looked at my statement online and saw the credit of $17.84. Case closed.

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