Costco shopping and your credit score...

I’ve heard that Costco will be introducing their new Visa card in the near future. I’ve also heard that it will have the same conditions and benefits as the soon to be replaced American Express card.

My questions are these:

Would it be best for my credit score to simply allow my Costco AMEX card to expire in May of 2018 {with occasional purchases}, as opposed to cancelling it? I have had the card since 2007.

Instead of the Costco Visa card, I have determined that the Citi Double Cash Back Visa card would work best for my spending habits. Could I use the Citi Visa at Costco instead of their Costco Visa ?

If important, my credit score is close to 800.

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I’m no expert in credit scores, but I think you get points for having cards that have been open a long time. Also, I don’t think credit cards “expire,” they’ll mail you a new one before the expiration date. In other words, you’ll have the AMEX forever unless you cancel it. I’d keep it open if the annual fee isn’t a problem.

That’s up to Costco. I do know that when AmEx was their card, it didn’t have to be a Costco AmEx.

Not expire, but if the card goes unused for a period of time (typically like 1-2 years), the Credit Card company will close the account on their own. On your credit report it will be marked as “Closed, no balance” and doesn’t hurt your credit score (except that your total available credit will go down).

Is it your oldest card? Then, no. If not, go ahead and cancel it.

Good point!
I will just completely stop using it and let AMEX close it for me.

To answer the other question recently posted, it is not my oldest card.
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I think that your Costco AMEX card will be void once Costco issues the new Costco Visa card. I also do not think that you can use any AMEX card at Costco, but that it must be specifically the Costco Amex. I’d be surprised if those statements are not correct. AMEX is offering a special AMEX card once Costco switches over, which, they say, will give you the same benefits as the Costco AMEX.

I have used my normal AmEx card at Costco many times.

That’s a surprise to me. Did those purchases count for your cash back award?

I’m an expert in credit scores.

You should keep credit cards open, especially if they’ve had balances before.

Having potential debt that you have been using wisely helps credit scores. Reducing the number of credit cards open is bad in this example:

>You have $10,000 in credit card limits. You have 1000 in credit card debt. You are using 10% of your revolving debt potential.

>You close all but one card, and now have $1000 in credit card debt, and $2000 in revolving debt potential. You are using half your revolving debt potential. This is worse than the scenario above, in which you are using just 10%.

Keep accounts open. Use them. Pay them. This develops a history. Use very little % of that revolving debt long-term and your score will be higher.

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The first part is right. From what I’ve read the Costco AMEX accounts will be closed after the switch, which I believe was originally supposed to be March but has now been pushed back to mid-2016.

However, I’ve used another AMEX at Costco many times without issue and I believe the once Costco switches to Visa the same will be true; other Visa cards will be accepted.

You will have to be surprised then, because 1.5 of your two statements are incorrect. :slight_smile:

AMEX will be replacing the Costco card with a new card to the current Costco customer user base. I gave you partial credit for this one, :slight_smile: because that particular AMEX card will be void, but if LGM does nothing, he will still have an AMEX card.

As to your other point, all AMEX cards have been able to be used at Costco, although non-Costco cards didn’t get the special Costco benefits.

Similarly, once Citi takes over, all Visa cards will be able to be used at Costco, not only the Citi Costco Visa.

As to the OP’s question, there are a few variables. The easiest answer is to not close it. It won’t hurt you to leave it open, and could potentially hurt your score to close it.

Having said that, I doubt it would hurt much to close it, if at all. It could hurt a bit to close if:

  1. It is your oldest card (and you have said that it is not)
  2. You have few other cards/lines of credit. If this is one of your only trades, it could hurt a bit to close it (especially if you are carrying a balance on another card). Since you say your score is about 800, I doubt either of these is true, so, while I would probably keep the card open, closing it should have little to no impact on your credit score.

If you wish to close your account, call them and do so. Do not assume that it will close by the expiration date, and normally they do not.

I asked a Costco employee, although now I forget exactly what he said :smack:. My memory is that the AmEx cards will be still accepted, but I don’t know if there was an end date to that.

Depends. I had a Discover card unused for years and they never closed it. I also had a [del]Providian[/del] [del]Washington Mutual[/del] Chase card that they did close due to non-use.

Thanks for the replies so far. I’ve learned a lot.

I’m 51 and keep two credit cards, {the AMEX and a MasterCard}.
The MasterCard I’ve had for around 10-12 years.

I do not want to pay any fees on my present AMEX just to keep it open after the transition, {because I will be paying for my Costco membership separately in the near future}.
Finally, I have never had a credit card balance in my life. Some months the two CC bills are $300 to $400 in aggregate or $3000 to $4000. I just bite the bullet and pay them off every month.

My last Costco rebate check was for $467. So that gives you an idea of my spending habits with the AMEX card.
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No, if you’re talking about the AMEX cash back and not the 2% Executive Member rebate. You might be missing out on the cash back but there might be other reasons for using a different AMEX that outweigh that.

According to these posts by AMEX customer service Costco AMEX cards will not be able to be used after a certain date, regardless of the expiration date on individual cards.

The issue I’ve heard brought up is of account longevity, which I believe plays a role in credit score. So you’ve had a Costco AMEX card for 10 years and they close the account. You can open a new AMEX but your account history is now 0 years instead of 10 and that can negatively impact your score…or at least that’s what I’ve read. Maybe Philster can tell us if that’s true or not.

I don’t have anything to add, except a question. Where/when did you get the Citi Double Cash Back Visa? I have the same card, except it’s by Mastercard.

Hmmm, I don’t have the Double Cash back card yet…
I thought it was a Visa, but I might and quite probably am wrong.
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Damn, I just Googled a Double Cash back Visa card in quotes, and this thread was the first result on Google !
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Mostly correct, but having* too much* revolving credit can also hurt.

I wouldn’t count on it. My Capital One card hasn’t been used in something like 10 years, and it’s still open and, every once in long while, I get a mailed statement saying I owe $0.00. There’s also an Amazon card I opened for the free $50 or whatever it was years ago, I haven’t used it, and that’s still open, too. I’d call if I wanted to make sure it’s closed.