Costco is well-known for its membership-only warehouse clubs, offering members a variety of benefits such as exclusive access to low-priced bulk items, discounted fuel, and a wide range of other services. One of the most popular perks of being a Costco member is the ability to apply for the Costco Anywhere Visa® Card by Citi. This credit card provides additional benefits, including cash back rewards and special discounts. However, many cardholders wonder what happens to their Costco credit card if they decide to cancel their membership. In this article, we’ll explore the relationship between Costco membership and the Costco credit card, and what you need to know if you’re considering ending your membership.
What is the Costco Credit Card
The Costco Anywhere Visa® Card by Citi is specifically designed for Costco members. Knowing the basics about this card will help you understand the implications of canceling your Costco membership.
Issuer Information
The Costco Anywhere Visa® Card is issued by Citi, a leading global bank. While it is branded with the Costco name, the actual management of the card is handled by Citi. This distinction is important because, while Costco and Citi work closely together to offer the card’s benefits, the credit card is ultimately a Citi product.
Benefits of the Costco Credit Card
- Cash Back Rewards Structure: The Costco credit card offers a competitive cash back rewards program, including 4% back on eligible gas purchases (up to $7,000 per year), 3% back on restaurants and travel, 2% back on Costco purchases, and 1% back on all other purchases. These rewards can be significant for frequent shoppers and travelers.
- Additional Perks for Members: Cardholders also benefit from extended warranty coverage on purchases, travel accident insurance, and no foreign transaction fees—an attractive feature for international travelers who are also Costco members.
Impact of Canceling Costco Membership on the Credit Card
If you’re thinking about canceling your Costco membership, it’s crucial to understand how it affects your Costco credit card.
Automatic Cancellation of the Credit Card
The Costco Anywhere Visa® Card is closely linked to your Costco membership status. If you cancel your Costco membership, the credit card is automatically canceled as well. This is because the credit card is designed exclusively for Costco members, and non-members are ineligible to hold the card. When a membership lapses, Citi is notified, and the credit card account is closed.
User Experience
- Personal Anecdotes from Users Who Have Canceled Their Membership: Some users report confusion or frustration after canceling their Costco membership, only to find their credit card also canceled without additional notice.
- Common Concerns Regarding Automatic Cancellation: Many cardholders worry about the impact of automatic cancellation on their credit scores and the loss of cash back rewards that have not yet been redeemed.
Steps to Cancel the Costco Credit Card
If you’ve decided to cancel your Costco credit card, following the correct steps will ensure a smooth process.
Recommended Process for Cancellation
- Visiting a Costco Location for Assistance: You can cancel your Costco membership (and by extension, the credit card) by visiting a Costco location and speaking to a representative at the membership counter.
- Calling Customer Service: Alternatively, you can call Costco’s customer service at 1-800-774-2678 to initiate the cancellation process. Make sure to have your membership and credit card information handy.
Timing Considerations
- Importance of Timing in Relation to Membership Renewal Dates: It’s essential to consider the timing of your cancellation. If your membership renewal date is approaching, canceling just before the renewal can prevent additional charges.
- Recommendations for Ensuring the Last Payment Is Made: Before canceling, ensure that all outstanding balances on your credit card are paid in full. This will prevent any issues or confusion after the card is canceled.
Consequences of Canceling the Credit Card
Canceling your Costco credit card has several potential consequences, both financially and in terms of benefits.
Impact on Credit Score
- How Canceling the Card May Affect Credit Utilization and Score: Canceling a credit card can affect your credit utilization ratio—the amount of available credit you’re using. A higher utilization ratio can negatively impact your credit score.
- Clarification on the Long-Term Effects: The age of your credit accounts is another important factor in your credit score. Closing a credit card, especially if it’s one of your older accounts, could reduce the average age of your credit history.
Loss of Benefits
- Overview of Benefits Lost If the Credit Card Is Canceled: Canceling your Costco credit card means losing access to its generous cash back rewards, travel perks, and other benefits.
- Implications for Those Who Frequently Shop at Costco: Frequent Costco shoppers may find the loss of the 2% cash back on Costco purchases and the 4% back on gas particularly impactful.
Alternatives to Canceling
Before deciding to cancel, consider some alternatives that may allow you to keep some benefits.
Keeping the Credit Card Without Membership
Options for Maintaining the Credit Card While Not Being a Member: It is possible to keep the Costco credit card without an active membership. However, you may be charged an additional fee, or you might not be able to use the card for Costco purchases.
Discussion on Potential Fees or Limitations: While the card may still work elsewhere, its primary benefits tied to Costco purchases would be lost or limited.
Product Change Options
Exploring Potential Product Changes to Other Citi Cards: Instead of outright canceling, you may be able to switch to a different Citi credit card that better suits your needs, which could help preserve your credit score.
Addressing Concerns and Misconceptions
Understanding the common misconceptions about canceling the Costco credit card can help you make an informed decision.
A. Common Misunderstandings
Clarifying Myths About Credit Score Impacts and Membership Requirements: Not all aspects of canceling a credit card will negatively impact your credit score, and there are ways to minimize the impact.
Personal Preferences
User Preferences on Whether to Cancel the Card or Let the Issuer Close It: Some users prefer to keep the card active until the issuer automatically closes it, which may give them more time to use remaining rewards or benefits.
Conclusion
Canceling your Costco membership will result in the automatic cancellation of your Costco credit card, which can have several implications for your credit score, financial benefits, and shopping habits. Before making a decision, evaluate your personal spending habits, the benefits you value most, and potential alternatives like switching to another Citi card. Always consider the impact on your credit score and whether it’s worth the trade-off.
