Credit card two-step leaves Costco customers sidelined

By | August 9th, 2016

Roseanne Skopp and Milissa Martinez have credit cards that they not only can no longer use, but with balances that they still have to pay – and that are still accruing interest.

The source of their agony? Costco’s recent breakup with American Express and its new partner, Citibank.

Both Skopp and Martinez requested help from our advocacy team in navigating the change and adjusting their accounts.

In February 2016, American Express announced that it was parting ways with Costco Wholesale. Costco American Express cardholders would have their cards invalidated and replaced by Citibank accounts.

Costco’s change in credit card partners means that the American Express Costco Co-Brand Card is not accepted at Costco, and that Costco does not accept any other American Express cards for payment of purchases.

Skopp claims that she did not authorize Costco to issue her a Citibank card, let alone issue charges to her on it, and is looking for legal assistance with her case, which we as consumer advocates can’t and don’t provide. Our advocates have advised her to contact an attorney to pursue legal action against Costco and Citibank. She’s hoping we can assist her anyway.

Martinez, on the other hand, would be only too happy to use a Citibank card issued by Costco. She was “very happy” with her Costco Amex card until the partnership ended. Amex invalidated Martinez’s card but will not transfer the $5,000 balance of her account to Citibank because of an issue with her address:

I am having an extreme problem with American Express. They deactivated my Amex/Costco card stating there was an issue with my address. I had spoken to them multiple times before about the same issue and was always told that there was no issue.

Our home burned down; I lost everything exactly one year ago this week.

I advised Amex of this. I said I’d give them a permanent address when I had one but for now [the address on the account] is the address. It is on my and my son’s California IDs and on file with the state. After a long, drawn-out week with Amex, I was told today:

  • not only will they not reactivate my card and account
  • I have to keep paying the card [balance] and [it will keep] accruing interest.
  • They will not transfer my balance to Citibank as promised and I have the cards for already.
  • They will not transfer my account to another Amex card.
  • I cannot use the Amex card anymore but still must pay it.

To summarize: Amex won’t transfer Martinez’s balance to Citibank or allow her to keep using its card, but it’s charging interest on the remaining balance on its now-useless card. And this is after a tragedy in which she lost everything.

Not only that, Amex sent her account to collections — even though she’s always paid it in full on time. She’s spoken many times to Amex personnel, including supervisors, who have been unhelpful at best.

We may not be able to do much for Skopp, but Martinez’s case cries out for help. She wants her Amex account taken out of collections, reactivated and transferred to Citibank — without the accrued interest. Our advocates have contacted American Express on her behalf.

As a takeaway, we advise all Costco members to be completely aware of the terms of Costco’s change from Amex to Citibank, including the deactivation of Costco American Express cards and transfers of balances, as well as interest charges, to Costco Citibank cards. Company contact information for Costco, American Express, and Citibank can be found on our website.

Also, credit card customers who need help and haven’t received it might file complaints with the Consumer Financial Protection Bureau.

Above all, don’t be taken by surprise.

Has the change in Costco credit card partners from American Express to Citibank been handled well?

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