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Associated Press

Costco Wholesale customers will have more flexibility with their plastic next year.

That’s the main takeaway for shoppers from Monday’s announcement that the giant warehouse club struck a new deal with Citigroup and Visa to replace its 16-year partnership with American Express .

The new deal means that consumers will be able to use any Visa-branded credit card when they make purchases at Costco stores. Previously, they were only able to use AmEx credit cards.

Visa already dwarfs AmEx in terms of the number of cards that are in shoppers’ hands. There are 281.4 million Visa cards in circulation compared with 54.9 AmEx cards, according to the Nilson Report, a card-industry newsletter.

The new deal takes effect April 1, 2016, although there could be some overlapping period in which AmEx cards are still accepted at Costco.

Costco will continue to accept debit cards from both Visa and MasterCard .

The current AmEx Costco card that is in the hands

of many Costco shoppers will be replaced by a Costco Visa card that is issued by Citigroup. AmEx will try to get the existing holders of the AmEx Costco cards to switch to another type of AmEx card, but it won’t be accepted at Costco.

It isn’t clear yet what it all means in terms of rewards, which is a key reason why Costco shoppers like having a Costco-branded card in the first place. Costco didn’t provide many details of the new Citi card, saying only that it “would provide generous rewards to Costco members.”

While any Visa card will be accepted at Costco under the new deal, the same can’t be said for Citi cards. Most of Citi’s vast card portfolio is processed through the MasterCard network, so many of Citi’s existing cards won’t be accepted at Costco.

Citi does issue a few credit cards under the Visa brand, including the Hilton Hotels co-branded card and the ThankYou preferred card. Those will be accepted at Costco since they are Visa cards.

Category: Credit

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