Costco is dumping Amex for Capital One

http://business.financialpost.com/2014/09/26/costco-american-express-card/

Costco customers, who will no longer be able to use their American Express card in 2015 in the big box store, are being switched to Amex’s SimplyCash card.

Amex Bank of Canada sent out a notice this week along with a message from chief executive Howard Grosfield about the change.

It was revealed this month that American Express was out at Costco, replaced by the Capital One Platinum MasterCard. Costco also plans to accept other MasterCard credit cards at its locations in Canada.

On the issue of accumulated rebates earned under old American Express cards, the company said any cash that you qualify for up until Sept. 25 will be included in a final cash rebate to be mailed out in the next two to three weeks.
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Existing American Express customers will be receiving the no annual fee SimplyCash card in the mail in the coming weeks.

The card is designed to simplify the cash back process, paying 1.25% on all transactions as opposed to paying a higher premiums for services like gas or dining out.

American Express is going to offer its existing customers being switched over a teaser for the first six months, allowing 5% cash back on all eligible purchases at gas stations, grocery stores and restaurants. It is subject to a maximum $250 in cash back.

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It really is the end of an era, considering the partnership between Costco and American Express lasted more than 15 years. Costco is getting their just dessert because they keep pressing rates downward for all their suppliers, including Amex. So only they were making money out of this arrangement, while most people who have the TrueEarnings Amex card either in Canada or the US use it only at Costco and not anywhere else. Costco loves to promote a reputation of a humane big box store with a sense of social responsibility, and it is true they treat their employees exceptionally well, but it only means they squeeze their suppliers even more mercilessly. In that sense they're ultimately no different than the Wal-Marts and Targets of this world.

It is Canada for now, but make no mistake, they're saying Amex will keep being accepted in the US too, but it's only because the Amex Canada contract expires at the end of 2014, while the American one expires at the end of 2015. They will switch to a Costco Capital One MasterCard as well.

I was there this afternoon and they were pressuring everyone with an Amex to sign up for their MasterCard, I used another MasterCard to pay and it worked.

Otherwise in general there are not many reasons to use an Amex credit card considering its low acceptance rate, except that they have better services, so if you want to use the extended warranty Amex is more trusworthy. But it does cost more to retailers to use it.

All the more so in the US, which has the highest credit card merchant fees in the world.

http://www.businessweek.com/stories/2006-11-05/cap-ones-credit-trap

Capital One is a pretty sleazy company, they've long catered to "sub-prime" types of people with bad credit ratings, and have often been considered a last resort credit card company, although they do have cards which are a lot better.

This link describes their scheme of giving some people multiple low limits credit cards, in the hopes someone accidentally goes over the limit and is forced to pay outrageous fees to Capital One.

They're the only CC company that will never, ever raise your credit limit on demand, and who will seldom ever raise anyone's limit.

In Canada they are the second biggest customer of Canada Post.

Capitol One is pretty bad. My credit cards keep getting bought up by shady companies like them, then suddenly I have extra BS to deal with so end up having to cancel.

Amex is pretty unusable since hardly anyone takes it, though.

http://www.itworld.com/article/2839251/why-currentc-will-beat-out-apple-pay-in-the-end.html

There's increasing talk about CurrentC, a smartphone debit system that intends to cut credit cards out and which is owned by retailers.

Since they pay from 1,5% to 3% in fees for every transaction done through credit cards, it's no wonder they are looking to get rid of them. They plan to offer incentives like special offers and such.

However, the disadvantage is that you have to allow direct access to your banking account, and if there is a fraudulent transaction, you lose your money during the investigation, and your bank account might even get frozen.

Honestly I don't care about these "instant payment" solutions much. It is a solution in search of a problem. It is a solution to favor the retailers and payment processors, and not the consumer.

A credit card gets your cashback or other rewards, extended warranty, purchase protection, often emergency travel medical insurance, and a lot of such interesting features.

That article makes it sound like its only the Costco's in Canada. I've always used my JetBlue Amex there (never had the Costco one). Not a big deal to me, so long as I can use one of my Mastercards. Will never deal with Capital One. Those guys are sleeze bags. I once applied for one of their cards. My credit was good, but not outstanding. I had several other cards with limits in the the $5-10k range, but when it got harder to use my miles for airline tickets, thought I'd try the Capital One card. They sent me a card with a limit of $150.

Humanity has risen! said:

http://www.itworld.com/article/2839251/why-currentc-will-beat-out-apple-pay-in-the-end.html

There's increasing talk about CurrentC, a smartphone debit system that intends to cut credit cards out and which is owned by retailers.

Since they pay from 1,5% to 3% in fees for every transaction done through credit cards, it's no wonder they are looking to get rid of them. They plan to offer incentives like special offers and such.

However, the disadvantage is that you have to allow direct access to your banking account, and if there is a fraudulent transaction, you lose your money during the investigation, and your bank account might even get frozen.

Honestly I don't care about these "instant payment" solutions much. It is a solution in search of a problem. It is a solution to favor the retailers and payment processors, and not the consumer.

A credit card gets your cashback or other rewards, extended warranty, purchase protection, often emergency travel medical insurance, and a lot of such interesting features.

Click to expand...

The problem with CurrentC is that it is very user unfriendly. It involves you setting up a code on your phone, then a code on the terminal, then matching them or something. There was a good article in which it compared Apple Pay to CurrentC (I think it was on The Verge or something, but I can't find it).

blatantninja said:

That article makes it sound like its only the Costco's in Canada. I've always used my JetBlue Amex there (never had the Costco one). Not a big deal to me, so long as I can use one of my Mastercards. Will never deal with Capital One. Those guys are sleeze bags. I once applied for one of their cards. My credit was good, but not outstanding. I had several other cards with limits in the the $5-10k range, but when it got harder to use my miles for airline tickets, thought I'd try the Capital One card. They sent me a card with a limit of $150.

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It is only Costco in Canada for now, but it will be Costco in the US very soon as well. In fact as I said the contract with Amex and Costco US runs out on December 31st 2015. But yes you'll be able to use any MasterCard after.

And yes Capital One is extremely sleazy.