Last Updated on 09/20/2020 by GS Staff
Costco is probably one of the most confusing stores when it comes to what payment methods they accept. Not so long ago, Costco’s credit card of choice was American Express. This meant that you could only pay with American Express, a Costco credit card, debit/ATM cards, cash, checks, and EBT. Alternative credit cards such as Visa, MasterCard, and Discover were not accepted.
Recently, Costco ended its relationship with American Express. Now the credit card of choice at Costco is Visa. Costco warehouses currently accept Visa, Costco credit cards, debit/ATM cards, EBT, cash, personal/business/Traveler’s checks, EBT cards, Costco Shop Cards, and mobile payments. Costco warehouses do not accept Discover card despite it being one of the major credit cards. You can, however, use a Discover card on Costco.com.
It may be difficult to understand why Costco does not take some of the major credit cards, such as a Discover, at its warehouses. However, Costco is all about keeping costs in check. Every time a credit card is swiped Costco pays a transaction fee to the credit card company (Visa). Costco was able to negotiate a favorable fee with Visa by being the exclusive credit card accepted at Costco stores. Just go to your local Costco on any given Saturday and watch how many cards are swiped while you are waiting in line. This will give you an idea of how enormous these fees can be over the long haul.
While Discover is not accepted at Costco warehouses, Visa is so widely used that most people are not affected by Costco’s exclusivity to Visa. Many people have only a Visa as their primary credit card or have both a Visa and Discover card. However, we understand the frustration of people that only use Discover. It would be nice if Costco accepted all major credit cards, but the consumer would likely pay for that luxury with higher product prices or membership fees.
Image – Mike Mozart/flickr