4 Reasons Why Capital One's Costco Canada Partnership Might Fail
* This article was published in 2014 at the onset of the Capital One-Costco partnership; the partnership has since evolved, and the article’s contents may be outdated. Those interested in learning more about which credit cards are best for earning back at Costco are advised to read this article instead.
As we called it in August of 2014, Costco Canada ended its 15 year-old credit card partnership with American Express and began a new one with Capital One.
Capital One has already soft-launched its new product in select stores, and our understanding is the new co-branded Mastercard with Costco will fully launch by the end of September 2014. American Express will no longer be accepted at Costco as of January 1, 2015.
With over $17 billion in Costco Canada revenues at stake, this is a significant win for CapitalOne and Mastercard. However, we’re not so sure Capital One is going to come away from the deal profitably.
We believe Capital One will face four significant challenges with the Costco program:
1. Profitability:
One has to imagine that Capital One offered more compensation to Costco than American Express was able or willing to match. But remember, the incumbent always has insider knowledge, meaning American Express knew more about how the Costco credit card portfolio behaved than Capital One did when Amex walked away from the table. In all likelihood, Capital One gave away most of the interchange revenue to Costco, thereby relying on Costco customers to spend out of store on their co-branded credit cards. We’re not convinced that’s going to happen nearly often enough.
There has always been a self-fulfilling prophecy when issuers fall into the trap of relying on cardholder out-of-store spend to drive profitability. It goes like this: The issuer gives away in-store interchange revenue to their partner and relies on out-of-store spend for interchange profits; however, because the issuer is relying on the out-of-store spend to fund their interchange revenues, they offer a weaker rewards rate to cardholders for out-of-store spend. As a result, the cardholder uses the co-branded card almost exclusively in the partner store, and then uses another card that offers them a better value proposition for their out-of-store spend. Then the issuer only gets the unprofitable in-store spend, and not much of the more profitable out-of-store spend. It’s a spiral of declining margins.
More than a handful of issuers have found themselves in that predicament with retailers. The only winners are the retailers (in the short term) and the cardholders.
2. Size:
Another challenge Capital One will face is competition from other Mastercard issuers for Costco customers’ share of wallet. A number of major financial institutions—including BMO, MBNA, and Tangerine—offer attractive Mastercard options. When American Express had the Costco program, if a customer wanted to use a credit card within Costco, they had to get the Costco Amex card (very few people already had an alternate Amex card). Now, a large number of Costco customers already have a Mastercard to start with. As a result, we actually believe there will be fewer Capital One Costco cardholders than there were Amex Costco cardholders.
3. Interchange:
The Minister of Finance has asked both Mastercard and Visa to lower interchange by 10-15% within the next few months. While Mastercard may exclude the “wholesale warehouse” merchant category from an interchange reduction, thereby protecting Capital One’s interchange within Costco’s stores, it can’t do anything about protecting Capital One’s interchange margin outside of Costco stores. This is when a Capital One Costco cardholder would use their card outside of Costco. This will put even further strain on Capital One’s out-of-store spend margins, which we surmise is the primary place Capital One is relying on to make its money. As a result, it will either have to eat the margin reduction, reduce the cardholder value proposition, or reduce Costco’s compensation.
4. Slow Start:
Capital One is not buying the American Express Costco credit card portfolio. That means Capital One is starting from scratch. In most cases, the new issuer buys the co-branded accounts from the incumbent issuer, so cardholders don’t have to re-apply. TD did this with Aeroplan, Capital One with HBC, RBC with Shoppers, CIBC with Petro-Canada, etc. Growing organically will slow things down for Capital One.
In the meantime, American Express will do everything in its power to retain former Amex Costco cardholders and convert them toward opening a card within the Amex suite. They’ve already launched two new cash back credit cards (not charge cards), which somewhat mirror the Costco cash back card, but nonetheless both offer market-leading earn rates.
- The SimplyCash® Card from American Express 2% cash back on eligible gas purchases in Canada, 2% cash back on eligible grocery purchases in Canada (up to $300 cash back annually), and 1.25% cash back on all other eligible purchases with no caps at the base rate, and a bonus. In your first 10 months as a new SimplyCash® Card from American Express Cardmember, you can earn a $10 statement credit for each monthly billing period in which you spend $300 in purchases on your Card. This could add up to $100 in statement credits in the first 10 months. Conditions apply. The annual fee is $0.
- The SimplyCash® Preferred Card from American Express offers 4% cash back on eligible gas station purchases in Canada, 4% cash back on eligible grocery store purchases in Canada (up to $1,200 cash back annually) and 2% cash back on all other purchases. The annual fee is $9.99/month (Equals a total fee of $119.88 annually). There’s also a Welcome Offer: In your first 10 months as a new SimplyCash® Preferred Card from American Express Cardmember, you can earn a $40 statement credit for each monthly billing period in which you spend $750 in purchases on your Card. This could add up to $400 in statement credits in the first 10 months. Conditions apply.
All that said, we are excited to see what the new Capital One Costco cardholder value proposition will look like, and we’ll hopefully be proven wrong. With an exclusive deal like this, both at the issuer and network level, perhaps Mastercard subsidized Capital One and contributed to the cardholder value proposition. We’re skeptical it will be enough.
Recommended Read: Is a Costco Membership Really Worth It?
This post was not sponsored. The views and opinions expressed in this review are purely my own.
American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. Conditions apply.
Article comments
Have been forced onto the CapitalOne card owing to Costco for the last year now. Having extended warranty on Costco products, membership cashback, travel insurance warranties, ease of using a single card at warehouse and gas, decent exchange rates, etc. are all the reasons that I would like to continue using this card.
Big issue !! They just not offering any credit limit. The low 2k has not been amended since the start.
I have an impeccable record of paying the entire bill, never defaulting, keeping a clean credit score. Every other card have made my limits in excess of 8k, but CapitalOne refuses to do the needful.
Owing to the Costco relationship this is the only card we use but have to keep paying to top up this card with its measly limits.
Any ways of increasing the limits?
Or is there a competing product out there?
Don’t like to use multiple cards but getting frustrated with this arrangement now.
Hi Mayank,
Though i’m not a fan of store cards. If you can’t get Costco to increase your limit and you would like another competing store card, try either the Canadian Tire Triangle Mastercard to collect Canadian Tire rewards or The Walmart Rewards Mastercard, which gives you points toward purchases at Walmart.
I too hate the low limit. I have $5000 to start. And even though
Scotia momentum $19,000 limit
Scene visa $17,000 limit
TD visa cash back $19,000 limit
Amex cobalt $37,000 limit
….. Costco mastercard refuses to budge. Unfortunately for me. I care more about my utilization rate. Which affects your credit score. Mine is 836 without trying. I will not use Costco. For anything more than $800 haul which is paid off the moment I get home. Because anything decent you buy at Costco. Will go WAY past 3% utilization which lowers your credit score. I typically spend $3000-5000 a month. across all cards. I cannot be bothered. To track tiny few hundred buck purchases to protect my nice score.
Remember. The higher your limit. The lower your utilization score. The lower this score. The higher your credit score. The higher your credit score. The more limit they let you ask for. So. The fact capital one won’t budge. Means simply don’t use them. Plus their rewards. Is dismal compared to many other cards out there (yes with annual fees) but if you play your purchases right using the right card. You make money. I make $25 amex gift card reward every 5-6 weeks just for using that cobalt card for things that rewards me highest. At $10/month fee. I still make money at the end of 2 months.
Great advice Pebbles, plus, the Costco Capital One Card is ending anyway, so it’s probably best to jump ship sooner rather than later.
we make approx. $200K/yr; have over 800 credit scores; carry zero debt; and cannot get our limit increased. Ours is approx. 6,000; but, a monthly grocery bill of $1000+; gas $1000+; then other things. We keep our balance below 30% to keep our credit score in great shape, should we need it.
Your credit limit of $300 isn’t really worth paying $80 a year for. If you’re going beyond 30% of the limit ($100) then you’re not helping your credit score anyway. It’s a good card to have and just use for a recurring purchase, like a subscription (cell phone?) or buy a pair of shoes, then pay it off in-full once the bill gets printed and do it before the due date. There are better cards out there, I’m sure. You could use your credit card to buy a $100 COSTCO GIFT CARD, once a month. Good luck.
Great advice Chris, I couldn’t have said it better myself.
I stupidly got a Capital One secured credit card at a cost of $80.00 per year in order to re-build my credit.
After a year with a credit limit of a measly $300.00, I was denied an increase when I requested one with no valid reason.
After reading the comments here, I think my best bet is to cancel the card before they hit me with the $80.00 yearly charge is however, I don’t want to mess up my credit and am not aware of other credit card companies that could/would accept me and help me to rebuild my credit.
They are out there Kelly, have you considered approaching a money coach or debt counsellor for advice and help? I agree, you don’t want to suddenly cancel the card for fear of ruining your credit. I would explain your issue to a counsellor and see if they know of a secured card supplier that’s a little more compassionate. We also have articles on secured cards you can check out.
Costco is responsible for leaving its members no other choice except CapitalOne. I have been trying to reach CapitalOne customer service for the last two days, Oct, 30&31, 2020. The calls go to an answering system and all I hear is, “This mail box is full”. However could leave a message on Oct 31, 2020 but no one calls back. However on CapitaOne Web page is says, “Customer Service24/7. Having failed to reach anyone at CapitalOne, I had to escalate the matter with Costco Canada as they are the ones in first place that left members no other choice except CapitalOne. The only resolutions from Costco Canada was that they are switching to a different Credit Card company in Sep, 2021. Until then keep lumping it members.
Hi Manjit,
Remember too that everyone is pretty much working from home, which is probably what’s making usually 24/7 customer service less than that. I would still keep trying but do so with compassion and understanding if you can.
If you go to capitalone.ca there’s a CHAT that is helpful, most of the time.
I’ve used it too Chris, wasn’t that bad when I used it.
To deal with capital one is very difficult, try to call it take forever to go though and customer service is horrible, Amex were much better choice than Capital one
Hi K SS,
It sucks that you are having so much trouble and I’m sure the fact that customer service reps are working from home are making it worse. Just keep trying and be persistent, eventually I hope you’ll get what you need.
We will cut this card up as soon as Costco ends their relationship with them and we dearly hope it is soon. Their customer service seems to be tone deaf and their policies seem illogical. Our situation — We requested an increase to our modest credit limit for the sole purpose of paying off the balance of a relatively expensive holiday booked through Costco Travel, (The Costco Connection magazine — July/August 2018 issue — recommended using your Capital One Costco credit card to pay for Costco travel bookings). We had made the same request a year earlier for a prior holiday booking with Costco travel. On both occasions, we ended up speaking with the same rep from the Underwriters’ Department. Apparently, a credit limit increase was not possible because we didn’t spend enough every month on the card. Yet here was a second request to spend more that was denied because we haven’t spent more. This logic seems perversely counterintuitive. After the second refusal, we attempted to know why exactly they were refusing to increase our credit limit — especially since we pay the balance in full each month, have high credit ratings, have an Amex Reserve card without a limit and another card with a 45k limit (We could be using that card for the travel payment but our preference was to get the Costco Cap One points, especially when purchasing from Costco). We followed up with a letter outlining our frustration. They phoned us to tell us they’d received our note and then reiterated “no” they could not increase our limit. Almost felt like salt in the wound and a bit laughable. If a CEO of a large company can’t get a credit limit over $4k, something is amiss.
I tried the same. 6k limit. Asked for more. No increase, sorry. I have impeccable credit and never carry a balance. And then I thought, wait, why would they extend more credit to someone who just soaks up $$ every month (last year’s cheque to me was almost $900) and doesn’t pay any interest? Clearly I am using them for my benefit, without rewarding them by carrying a balance, so giving me more credit (or you, presumably) would detract from the rope, sorry, credit, they could offer a less resilient customer. Just my suspicion, no evidence. I just play a genius on television.
Hi David,
It has long been suspected that it sometimes works the way you laid out. I don’t think it’s a grand conspiracy, but I do think the credit card issuers like to see at least a little bit of a revolving balance.
Hi Beth,
I feel for you both. From what you’re describing, I agree that it really shouldn’t be this hard to raise your credit limit given your financial background. However, I will also say that store credit cards are not what I would use to make a big purchase. Not only are they higher interest compared to the average credit card, but as you are finding out, since they are controlled by stores, they have weird policies that run contrary to how most credit cards operate. Store credit cards are good for maybe buying the occasional piece of furniture, but I certainly wouldn’t buy something as substantial and life affecting as a vacation.
So Capital One got hacked, which meant the credit card I list on my application got hack first the two days later , it was my Costco Capital One. Yes I got the we are sorry and will do better letter, and TransUnion monitoring. But what really ticked me off, was after my replacement car arrived on Friday, an Identical card arrived on Monday, then a third an Identical card arrived on Tuesday. Thank god I never activated the card an any “duplicates” go missing. And on the Following Friday I got my fourth identical card. I will never activate it, called Costco head office, they didn’t care. Told Costco they should they represent each other in a marketing program, and as being a member since 1991 I was pissed.
The other issue with Costco Capital One the give cash back, but such a low limit Its hard to use in a business outside of the Costco, by comparison, Scotiabank Momentum pays cash back and high limit.
Hi James,
Thanks for the comment. When a credit card company is breached and data is exposed, its financial liability pales in comparison to the damage done to clients who have had their information put into the public. Fraudsters often operate using sparse details about you that are otherwise relatively accessible, either from public information or from previous hacks or simple Google searches. While this information may not be enough to defraud you, when a credit card company is hacked the missing pieces are often revealed. Swindlers can put the missing pieces of your identity together, and finally have enough on you to actually use—to open a new account, for example.
It’s normal for a company like Capital One to quickly covers all its bases and prevent this from happening to its clients, which is why you’ve been inundated with replacement cards. If you’re over Capital One, just close your account in good standing and don’t activate any of them. Choose a better card for Costco from the others out there instead: The Rogers Platinum or World Elite cards offer superior cash back and thrive in Costco, as any Mastercard would. Check out our list on the best Costco Mastercards available now and ask us if you have questions.
GreedyRates
This credit card is a NIGHTMARE. They have ruined my stellar credit rating by cancelling the card on a whim while I was out of the country for six months. I am now going through the tedious job of trying to put this right with no help from Capital One. Stay away from this card. I have had a TD Visa card and a PC Mastercard for 20 years without one hint of a problem.
Hello Lynn,
Thanks for providing your personal perspective on the Costco Mastercard from Capital One. We’ve been hearing a lot of disappointment from readers about the card, mostly stemming from Capital One’s poor administration of the Costco program and their overly-sensitive fraud team. The most frequent complaints have been about the fraud team freezing the card after a single missed payment, about the app not updating one’s balance and leaving them to get declined at the register, and that it can really only be used at Costco without issue.
Accordingly, it’s no surprise to us that the general sentiment surrounding the card has been critical. If you’re still looking for a card that works great at Costco, try anything that offers a flat rate of cash back on all purchases (like the Rogers World Elite card at 1.75%). Alternatively, the Costco Mastercard is OK to keep in your wallet, but not as a primary card. If you’d like a suggestion as to what might complement it best, let us know what your needs are and we can help you with a few great suggestions. Thanks again.
GreedyRates Staff
I am not happy with this card! I have been using if for over a year and a half. It has been headache after headache. From me always having to phone in and confirm that the online order I make regular transactions for are mine and not fraud…which I don’t mind if they notice the transactions that are actually fraud and not normal account activity, like transactions occurring in a different country which apparently are easily approved (Fraud Transactions). I always pay the full balance owed each month and have never missed a payment and after a year they would not give a credit increase. Then my card number was stolen and used in another country (Not normal account activity) where their fraud team did not detect it…when I called it in I was told not to do anything until I get the new card, so I did not pay the balance owing in case they gave me a new account number…I received the new card 4 days after my statement came out…I activated it and paid the balance off the same day. I went to make a simple transaction in a store only to have it declined, turns out they freeze the card if you are more than a day late paying your minimum payment…regardless of your spotless payment track record. So embarrassing standing in line and being declined for a $50 purchase when I had available credit! I need a reliable credit card for paying for my personal expenses for work and apparently a Capital One Card is not a good fit. They have lost out on my business moving forward, these issues are not worth the extra 2% cash back from Costco, I rather collect air miles with a credit card that works when I need it to and with an option to increase if I have proven I am more than capable of paying off the balance. I will be looking for a new card…recommendations welcome.
Hey Christy,
First of all, thanks for the thorough comment about your disappointing experience with the Costco Mastercard. It seems a bit frustrating to need to approve online transactions manually but better safe than sorry, in our opinion. Capital One is a bank that puts a premium on safety, so it’s not unreasonable to want to confirm that you’re the one making online purchases and not someone else. As you said, they found a fraudulent transaction which occurred in a different country, so this indicates that they are indeed capable (if not organized). It is hugely unfortunate that your credit was frozen due to an administrative error, which was obviously unjustified because they told you not to take any action on your old card until you received your new one.
For someone super organized with your finances like yourself, these types of banking mishaps are why you should be carrying more than one credit card at all times. Also, because you’re better able to get rewards value on more of your spending, carrying just one Costco Mastercard won’t be enough for the average Canadian. Since you said you’re interested in earning Air Miles, you should check out the BMO Air Miles World Elite Mastercard if your income is over $80,000 per year. You’ll be able to use it at Costco and earn Air Miles at a rate of 1 per $10 spent (also everywhere else)—not to mention a 3,000-mile bonus and first year annual fee waiver, plus 2 free passes to VIP airport lounges worldwide.
There are some Air Miles options for you if your income doesn’t meet BMO’s World Elite requirements as well. Aeroplan Miles are almost the same as Air Miles and are earned quickly when using the TD Aeroplan Visa Infinite card, which has a $60,000 annual income standard. With an annual fee rebate, up to 30,000 miles in your first year, and 1.5 miles per $1 spent on gas, groceries, drugstore and aircanada.com purchases (1 mile per $1 elsewhere), it won’t replace your Costco card (as it’s a Visa) but will complement it well. Let us know if you’re looking for more alternatives.
GreedyRates
Costco MasterCard really sucks. It shows on the so that I’m not at my balance yet I’m at zero available credit and my transactions are being denied. I’ve never had so many translations denied as I do with this card. I asked for a credit increase from the 6k they started me off with and they won’t increase it because they say I don’t have enough activity. How am I supposed to have activity when they deny my purchases. Unfortunately I haven’t found another MasterCard to replace that one for use at Costco. I may need to cut all ties with Costco because of their partnership with capital one and MasterCard. Once I find a better card I’m canceling this one again. I I had it once before until Td had one available. Unfortunately Td just had one for a short time to buy up that MasterCard company and shut them down.
Hey Joe,
Thanks for the comment. If your Costco Mastercard shows that you have zero available credit, then it makes sense that you aren’t able to make purchases. You balance must have reached your credit limit, meaning that there isn’t any left and nothing more can be charged to the card. Call and ask about this, but for now, go online and figure out what your balance is. We’re willing to bet that your balance is $6,000 or more, meaning you need to make payments (likely including interest) before being able to take advantage of your credit. Afterwards, call the bank and ask them one simple, two-part question: “What’s my credit limit, and what’s my balance?” This gives you all the info you need to ask the question you really want answered, which is “Why won’t my card work?”
We’d also be happy to recommend other cards that are great for Costco shopping. We’ve written a full article on this exact subject for Canadians and can highlight one of the best options for you. A basic card that might be better is the BMO Cashback Mastercard, which is simple and straightforward, offering 1.00% cash back on everything, redeemable everywhere. This is already less restrictive than the official Costco card, where you’re only able to redeem rewards at Costco locations.
GreedyRates
I only use my Capital One card for gas (2%) and restaurants (3%). You state you can only use the rewards at Costco. That’s not true. You can redeem your rewards at Customer Service for cash. I use another Mastercard with better rewards when checking out in the store.
Hi Jamie,
Technically if you have to go to Costco customer service to redeem your rewards for cash, you’re still only able to use the card at Costco. I guess you can use the money other places, but the rewards can only be redeemed at Costco.
Received notice today. Capital One is severing relationships with Costco Canada. Who will jump into the breech?
The Capital One credit card is a joke. I get it with an 8k limit but I charge around 40k per month on my Presidents Choice financial card. I was talked into this card at costco and when I called they said they could not raise the limit for 1 year because I am a new client. So I charged about 3 times the 8k limit by paying it off and charging again. I did that for two months and tired of that so I overpaid my card by 5k thinking it could be applied to my credit limit. Well I was wrong, I charged 8k and its been 11 days and it still says I have no credit limit left when I clearly overpaid my card by 5k. I call in and they said overpayments dont count and I asked how it could take 11 days after it said payment processed to apply it to my account. I am going back to my credit card and have applied for MBNA, maybe I will have better luck there. Costco should know that the company told me they are not in the business of giving credit and the card is only meant to be used at costco. Yikes, what a response from Capital One, a joke of a credit card company.
Stay away from Costco Master card unless you can keep at least 500.00 to 1000.00 ahead of them because they will find a way to rip you off by charging interest on your full amount of the monthly charges even if you have paid the majority of your balance off …eg: your Bill is for $3000.87 and you pay off 3000.00 you will be charges interest on the full 3000.87 anyway …meaning you are now ripped off !!!
They all work like that. I have had a half dozen cards, and every single one had that clause in the agreement. If you don’t pay it off in full, they charge interest on the full amount… from the date of use – not the due date. (In some cases they get to go back up to another month.)
Remember to fully read your 40+ page cardholder agreement. :/
I called and gave Master Card permission to accept a credit on my account from a medical company out of the country. They then denied the company permission to credit my account and closed my account. When I called they said my account had been hacked. I’ve got some swamp in Florida to sell you if you believe that one. I was off to China for a month with no credit card due to their denying my credit card after giving them permission on the phone. Not happy with Master Card but what can I do, that is the only credit card Costco accepts.
Add me to the list of dissatisfied customers using the Costco Capital One MasterCard. I thought I would replace my VISA Gold with this card but Capital One only gives me about 40% of the credit limit of my VISA. Nothing sucks more than getting to the front of the Costco line only to be told that the card won’t work. I have tried unsuccessfully to raise my limit but am told I have to wait 6 months to do so. I am one of those people who treats his plastic like cash (paid every month, carry no balance) so it is probably not in Capital One’s best interest to help me out. Come January I will cash in my accumulated points and cancel this card.
It’s a worthless piece of plastic compared to other services offered by other banks.
In Canada at least the Costco Capital One MasterCard is only to be used for personal purchases. Try this….have a couple thousand dollars in business purchases on a couple flat decks….then call Capital One and ask them if you can put this business purchase on your credit card. They will tell you it is for personal use only and not business purchases. If you ask Costco management about this rule they know nothing about it…ask the employees flogging the card…they too know nothing about this.
I had a call from a collection agency related to a Capital One backed HBC Card. I hadnt received a statement for months, and was unaware of a small balance on the card which I promptly looked after with the collection company.
We had moved over two years ago and my wife had changed our address with HBC for both our cards, and she continued to receive her statements. I didn’t, and didn’t notice.
Upon talking to Capital One, they claimed ignorance, and basically told me I was responsible for the problem in spite of the collection agency telling me that they had both my new and old addresses supplied by HBC and it looked like my statements were still going to my old address in spite of having the right info. Every HBC bill has always been paid, on time, in full, in my household, except for one it seems which was about 6 months old.
No statements sent, so I figured no balances. They had a phone number and Capital One said that they “reserve the right” not to bother calling people to tell them they are six statements behind, such as I was. The frustration that Capital One can create with a customer is uncalled for, its not good business, and downright rude.
They can take that card and shove it sideways. And every piece of Capital One mail for additional “credit cards” which comes to my home gets a “wrong address” on it, so that they get to pay the postage both ways. Good riddance. Maybe now they’ll stop sending me their junk mail.
I called Capitol One/Costco today to close both our primary & secondary cards. I was advised that if I do this, I will lose any cash back we have earned. The rule is you must keep the card active for 1 year or forfeit your cash back value. I chose to keep the card open until January of next year. It appears Capitol One will do anything to steal from the consumer! Beware Costco members. Any complaints you have with Capitol One, Costco doesn’t want to hear about it. They will direct you back to Capitol One. Good Luck!
So very true. Costco in a part of the rip off that is Capital One and they advertise with them, promote it and then if a complaint happens say they are nothing at all to do with Costco. First misstep I’ve seen costco do and repeat.
Too bad!
Same thing cancel as soon as rebate is issued.
We have mailed checks in plenty of time and Capital one is the only firm that seems not to receive the checks.
Well maybe if you read your welcome kit booklet before activating the card then you would of read in the terms and the conditions that if you were to cancel the card your points are forfeited… it’s not like the company made up the rule out of nowhere… but it’s people who are stupid like you who don’t read anything and sign off to a credit card so you’re the only one to blame 😉
A little harsh, but it is common that if you cancel your credit card, you forfeit your points. Where issuers differ is over how long you have after cancellation before your points are forfeited. One of the advantages of Aeroplan, Air Miles, Scene, and More Rewards cards are that the points you earn go into your loyalty bank – so that even if you cancel your card, they continue to exist.
GreedyRates Staff
When you compare Costco’s mastercard to other credit cards, it doesn’t even come close.
My AMEX gold gives me 4x the travel points back on practically everything I use it for with little restriction. The only real restriction is it’s AMEX and not necessarily used everywhere; however, I have not found any limitations with it. The Costco Mastercard can’t hold a candle to it. It’s kind of amusing when I’m at Costco and they try to sell me on the card, and I ask them, does it give me 4% back? No, well my Amex does.
If I don’t want a travel card, fine, I’ll move over to Visa momentum, again, 4% cash back on most everything I’d use it for with 2% practically on everything else. Again with little to no restrictions. The costco card can’t compare to it. Even doubling as a costco card, the amount i’d bring back from the Visa momentum would allow me to buy 6 costco memberships over and above the annual fee cost.
I don’t think it’s a case of it “might fail” I’m pretty sure it’s a case of “will fail”
Capital One refused my 91 yr old mother a MasterCard because she has no monthly income other than her pension income. Doesn’t matter that she has over $1.2M sitting in GIC’s between Royal and TD Canada Trust and another $85K sitting in bank accounts. Couldn’t pay me to take one of their cards now, especially when I read of all the problems everyone is having with it.
mmmm… if she has monthly pension income plus $1.2M interest income then she should qualify for the income bracket. then the problem might be her credit risking.
We are living thru a similar situation where thy don t want to gise us a higher credit limit even thought our history is perfect. I suspect they dont want to pay the bonus…
I was declined as well. I was worried when I got the notice that maybe something had happened to my credit rating without my knowledge! I called the credit center and they assured me that my credit rating was fine and there was nothing negative on it. Then I called Capital one and the person on the phone told me that sometimes the decline them “just because”. After reading all of this I am glad they turned me down! And I am going to ask for a refund on my costco membership. That was the only reason I got an American express card. I don’t like jumping through hoops.
Do not sign up for this card!!!! This credit card company is by far the worse that I have encountered in over 35 years. I made a mistake in overpaying on this card. I called immediately for the payment to be reversed and that is where the BS began. Lots of red tape, claims they didn’t receive the proper documentation from me, etc. They told me the process (once initiated) could take up to 60 days. Although I initiated the process immediately, after a month they said they never received the correct documentation from me or my bank to start the process, so the end was still another 60 days out. I cancelled the card. Was told it would take 7-14 business days to receive a refund for my negative balance of $1300. Funny how former card members are promised their credit in half the time that current members are expected to wait for their overpayment to be reversed. I’m not that optimistic that they are going to expedite the refund but because I got this card to use at Costco, I’ll be letting them know of my negative experience with Capital One.
Hi Cheryl, I had a similar problem. I called two times but in the end was given good info on how to reverse an overpayment. Just do a balance transfer to another card. I did it online actually to my TD Visa which took a couple days to go to my TD Visa which had a zero balance. From there I just transfered it into my chequing account. Both transfers had no fee show up. I think it’s because they had a positive balance so there was no cash advance fee.
I have used all kinds of credit cards and Capital One is the worst. Since Capitial One Mastercard doesn’t accept automatically payment, I have to remember to check the balance online because I don’t get mailed statements all the time due to my moving. With travelling, I missed one payment and I was charged for $45 interest. I called the customer service and the guy’s attitude was so bad. Even though I admit it was my bad of missing the payment and I asked the favor for adjusting the interest even partially, the guy kept blaming me that it was my fault so he could not do anything. I decided to close the account but he didn’t tell me that I have $70 cash back accumulated. So I end up losing it. He was on my account while I was calling and he could have told me that I had $70 cash back and I would not get it if I closed. I called again 2 weeks later after I found out I deserve $70 cash back. Of course, I got cold voice again that it is YOU closed the account and you would get anything. I totally understand it is Capital One’s decision what to do with interest and cashback. But do they want to keep customers with good customer service instead of pissing them off.
COSTCO made a BAD decision to partnership with Capital One for Costco card. I will never apply Capital One cards anymore. This also impact my COSTCO purchase. NO CAPITAL ONE, NEVER!!!
I agree. I have also have several credit cards and have to agree Capital One is by far the worst of all when it comes to customer service. I simply asked for a business Costco Capital One card, they said they don’t offer it. I ask could they increase my credit limit because my membership at Costco is a business membership and I was straight out told that my card was not to be use for any business transactions, proceed by a click on the phone. He hung up on me, so I proceeded to phone back and cancel my card. I wish Costco would have chosen a different Mastercard company. I have had MBNA Mastercard for a decade with no issues. I rather use it at Costco without the rewards than to deal with the worst service available in the industry from Capital One. I miss AMEX at Costco.
I recently got back from the U.S. Where I used my Costco CapitalOne MC. Going on line to check my account, there were several instances of double charging. I called CapitalOne and they said there was some computer glitches but assured me that my final billing statement would only a single charge. Believe me, I followed this up on my statement and all was fine but disconcerting nonetheless.
I just had the exact same problem. Never have I seen this with any other credit car I’ve owned. I also have about $2000 of fraudulent charges and its day 35 of dealing with it and it’s still on my account with no word from them. They just tell me to deduct the fraud charges and interest I’m accruing and pay the difference. This is hard to do when they haven’t made available to me my previous history since replacing my card. Obviously I’m slightly concerned with this. Seems like there should be a better process.
I just finished dealing with a disputed transaction (unauthorized charge by a hotel – they didn’t process my cancellation correctly). It took about 8 or 10 phone calls and 90+ days. No letter, no returned phone calls, barely any status from Capital One. Awful experience.
I’m going to be getting another MasterCard and dump Capital One once I get my cashback cheque.
We were also forced to switch from AMEX to Mastercard for Costco, and it’s been a negative experience for sure.
There is no option to pay immediately online, and payments can take 4-5 days to reflect on the card.
When frequenting the US, they do not accept the Candadian Mastercard, only AMEX which we had to cancel.
There are other minor issues we never had with AMEX.
We are quite disappointed and will be cancelling it soon, so that means no rewards.
Just want to share all our frustrations with capital one card from the beiginning. Lot of mistakes, lack of quicken easy interface…. Recently they even failed following up on 3 requests to increase our credit limit, agent not available, no call back.. . No customer service at all, and a big costco mistake!!!
Most people who applied for the CapitalOne MasterCard (including myself) probably did not notice the “up to 1% cash rebate on all other purchases” It’s only 1/2% on the first $3,000. which in my opinion is significant since there are many other MasterCards (eg President’s Choice) which give 1% on all purchases without a annual fee. I initially looked at the convenience of having only one card rather than a membership card + a credit card in my wallet. The Amex Simply cash gives 1.25% with no annual fee, but unfortunately is not taken at many places where I shop eg: Costco and President’s Choice SuperStore etc. I plan to cancel my CapitalOne card once the double rebate intro promo ends.
I use President’s choice and am very happy, I don’t need another piece of plastic in my wallet, and Capital One forces you to automatically renew your membership with their card, I want to retain the right to pay as I choose.
By the way Costco USA is also dumping AMEX April 2016 and switching to Citibank VISA, but all Visa cards will be accepted
I was very open to this new Capital One card that Costco told me it was much better than American Express. After one month I had over $ 5000.00 of fraudulently charged charges put on my mastercard chip all within 20 min. After four months I still have not got all my money back. After calling and going to see Costco all I get is the run around saying the credit will come but I never see it.
American Express has always looked after their clients and customers same day. My advice to anybody applying for the card don’t apply.
Capital One has taken almost 6 months after approving my CC and still cannot get it to my door and Costco claims that they cannot do anything about it. It seems that this case is more frequent than just me as I have heard of others with the same problem. Capital One will likely fail if they can’t even get a customer a CC. Not going to keep this account active. Worse CC company I have ever dealt with.
I actually received someone else’s cardin the mail a few weeks ago. Their name, my address. They have major IT issues at Capital One. I called them and let them know.
“In the meantime, American Express will do everything in its power to convert and retain former Amex Costco cardholders.”
I just called AmEx to ask about switching my Costco card to another product and I was told this card can not be migrated. I don’t know for sure if the CSR was wrong, but I was pretty clear with my question and she said I need to reapply.
So AmEx is not doing everything they can to keep my business. Could be something in their contract with Costco, but I’m not reapplying for a new AmEx card, I wasn’t using it much anyway
Actually, AMEX does not allow any of its cards to be converted (migrate) to a different AMEX product. The only conversion allowed is a downgrade from the same product line, such as from the AIRMILES PLATINUM to the AIRMILES GOLD. So this issue has nothing to do with contract agreements with Costco. However, after you apply and get a new card, u can call in and merge the two lines of credit and close the older account. In my case, due to my high credit limit ($28,000), when I applied for a new card the credit card department called me and offered me the new card with the same limit as the old card and forced me to close down the old account. So in a roundabout way, it turned out to be a product conversion, except I took a hard hit to my credit report and had to talk to the credit department. However, their service is truly professional.
The only bad thing about AMEX is that most places won’t accept the card!
No Amex advised that you were only pre approved for a replacement Amex card if you did a lot of spending on your Costco Amex and could apply for a new one once the Costco Amex cards were closed by them.