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What does the Costco transition from Amex to Citibank Visa mean to your FICO® Score?

, by Angela Lee

I love shopping at Costco. In fact, I got an Amex Costco TrueEarnings Credit Card because I can use it to pay for purchases both in and outside of Costco while earning great rewards. In addition, it has no annual fee and serves as my Costco membership card. With the news of the transition from Amex to Citibank Visa, I can't help but wonder what my options are and how the transition could affect my FICO® Score.

Back in October 2015, all Costco Amex card members received a communication from Paul Latham, SVP of Costco Membership and Marketing, advising that "Costco American Express Card holders need not apply for any new credit cards nor take any other immediate action regarding their Costco American Express Card(s)."

Based on a new SEC filing by Costco, it was shared that by this summer, the credit card portfolio will migrate from Amex to Citibank, including information about balances owed and credit ratings. Although the account number will change from an Amex to Visa, other data elements will not change on the credit report, meaning that the account date opened and payment history should remain the same. However, there may be a change in the credit limit which may result in a change in credit utilization. Also, the migration should not result in a hard inquiry on your credit report.

So it looks as if they have created a migration process that will likely have limited impacts on FICO® Scores for most members.

However, what if you don't want the Citibank Visa card or you want to retain having an American Express card? If you don't want the Citibank Visa card, you can choose to close the account. If you close the Costco account while it's still with Amex or once it is migrated to Citibank Visa, it may impact your FICO® Scores. Closing a credit card account can impact your credit utilization which could lower your FICO® Score. Depending on how long you've had your card, it could also impact the age of your credit history - possibly resulting in an impacted FICO® Score.

By end of summer, after the migration of my Costco Amex account to Citibank Visa, I will no longer be an Amex card member. However, I have been receiving offers from Amex to apply for another card type. I haven't decided on whether I will respond to American Express's offer as I understand it could lower my FICO Scores as an inquiry will be posted on my report along with a new credit card account being reported if I am approved.

I'm interested to know what other Costco Amex card members are going to do. What are you planning on doing with your Costco Amex card with this transition? Let me know in the comment section below.

Angela Lee