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Got a lot of email last week about Costco's shifty from American Express to Citi Visa, which has created a lot of bad press and dissatisfied customers.

MNB user Jeff Gartner wrote:

Kevin, we're Costco members and received both postal mail and email notices explaining the details of the switch from AmEx to Citi Visa, including an easy-to-read list of comparative benefits with slightly higher cash-back rewards with Citi Visa. We received our cards two weeks prior to the June 20th switch and had no problem activating them.

However, while Citi Visa's cash-back rewards are slightly better, we have experienced service issues signing up for our online account and automatic payment. More importantly, Citi Visa does not support Apple Pay (which we always use when available, it's the safest and easiest way to pay) and enables much fewer alerts than AmEx. Additionally, AmEx's telephone customer service was always exemplary (and we also have an AmEx Blue Preferred card), Citi's telephone service has been mediocre at best, comparable to the cable company or your wireless company on a good day (a very low bar). 

Costco certainly has to hope that its own excellent customer service reputation is not diminished by Citi's mediocre one.

From MNB reader Jay Schwarz:

I ran into some of this.  Since I don’t go to Costco very often and have been generally disappointed when I have gone in there, I decided to cancel my membership when the Amex news broke.  Since then, I’ve been battling with Amex and Costco because they can’t seem to coordinate my cancellation and they put my annual dues on the card after I cancelled.  I got a strange letter saying that I might or might not owe that money.  I guess those are the two possibilities!

From another reader:

For such a large successful company, WOW!!! They did a horrible job with communicating the change!! Or I should say ... NOT communicating the change!  There was news about it over a year ago. I thought it was effective this past January, but never happened. I kept my Amex card and Visa handy each time I shopped. I don't recall any signs in the stores, no announcements via any method?  

Really??!!  Wth were they thinking??

PS And you know they did it because of a profit disagreement with AMEX. I worked in the CPG industry and Costco is a huge part of many manufacturers business, and they are very aggressive in negotiating terms.

And another:

Costco: Let us decide which credit card we want to use, just like Target, Publix, Amazon and Walmart. The media reports focus on those switching from Costco branded Amex to Costco branded Visa. Like you KC, I don’t have or want either. I want to use the credit card that makes  the most sense for my family. What benefits a Costco Visa offers are almost irrelevant to my overall credit card usage plan. I am not “quitting Costco”, but we are planning on spending less at Costco if they do not take AMEX.

Not everybody, however, is disenchanted:

I read your update on the troubles that Costco has encountered with the switch from AMEX to Visa.  From my perspective it was one of the most flawless changes I have experienced.  It started with communications in February and followed with communications every month.  I received my credit card terms in April, my cards arrived in May.  On Monday, June 20, all current transactions on my AMEX card were transferred to the Visa account with Citi with the exact same credit limit.  Even my pending payment was paid to AMEX but credited to the Visa account.  I added the Citi App to my phone and changed all my payment information on different accounts (Amazon, etc.) to the new Visa card.  Seamless with little effort on my side.

Another MNB user wrote:

I can’t speak for everyone else but, Costco communicated to me more than sufficiently. They’ve been sending me emails and letters about the switch for months. Perhaps a bit too early. Everyone I know that has/had a Costco card were handled extremely well. And, it was obvious to me that the switch provided me more benefits (i.e. – saving more money). I have to wonder what the real breakdown is. Some are likely Citi. Some could have been AmEx. Some Costco. And some the consumers themselves.

Given the magnitude of this change, I am not shocked that there are post-change disruptions. I’ve been working with operations systems for decades and changes of this nature, by definition, will have troubles immediately after go live. I’d like to know how many DID NOT have a problem. Just because the support lines have blown up doesn’t mean this was poorly handled. What’s the percentage of the whole. That would be a far better measure of the quality of the switch.

The bigger measure will be how quickly it settles down.

For me, it was incredibly smooth. My surprise was, the ENTIRE account was simply transferred from AmEx to Citi-Visa. It wasn’t the shut down of one card and the start of another. Just a change of who’s handling the account. This is Costco’s account, not AmEx or Visa. They’re “simply” the clearing houses. Let that statement sink in a minute.

I did get one email about the passing of Dandy Dan Daniel, a New York radio icon on WMCA during the rock ' roll sixties:

You forgot to mention "Cousin" Bruce Morrow And Charlie Greer in the morning!!!

I actually didn't. Dan Daniel was one of the WMCA "Good Guys." Cousin Brucie and Charlie Greer were, if memory serves, on WABC. Totally different deal.

Amazingly, BTW, Cousin Brucie is still working, on satellite radio. Wow. He's still got the pipes, too.
KC's View: