As the Costco-Citibank credit card partnership hits full stride this month following the retailer’s painful split with longtime credit card partner American Express, Bank of America is making a change to its own credit card rewards program to win the business of warehouse club shoppers.
Beginning June 1, B of A is expanding its 2% cash-back rewards program and adding warehouse and wholesale clubs to the list, along with grocery stores. The bank also is increasing the quarterly cap on cash-back earnings on purchases at gas stations, grocery stores and wholesale clubs to $2,500 from $1,500, a B of A spokesperson said.
Costco Wholesale Corp.’s new Citi-issued Costco Anywhere Visa cards have been hitting customers’ mailboxes in recent weeks, and after June 20 the warehouse club will no longer accept American Express-issued Costco cobranded cards. Costco and Amex announced the end of their 16-year relationship last year.
Citi’s card provides 4% cash back on eligible gas purchases, including at Costco (up to $7,000 per year, with 1% back after that), 3% cash back on dining and travel, 2% cash back on all other Costco purchases and 1% back on other spending.
Amex's cobranded Costco card offered 3% cash back on U.S. gas station purchases up to $4,000 per year in purchases, and 2% cash back on dining and travel purchases.
Amex CEO Kenneth Chenault said the company’s split with Costco will affect one in 10 Amex cards in circulation and will dent earnings through this year.