Credit Cards

Why Doesn’t Costco Accept Credit Cards Other Than American Express?

By April 17, 2021 No Comments

Costco is a leading wholesale brand in the united states of America with thousands of products. Most people in the united states of America carry out purchasing daily use items from Costco. Have you ever wondered by Costco accepts only American express?

Why doesn’t Costco accept credit cards other than America express?

Every chain of the industry has their right to select any credit card they wanted. The government does not apply restrictions on the people or the brand to use a specific credit card. Moreover, there are no such laws in the united states government. As a  result, people and Costco have the right to choose any credit card they want. The main point arises as to why Costco decides to accept credit card payments using American express only. There are several reasons for it, and we will talk about them below.

America express is a status:

Most might be confused about what it means. However, if we look back at history, the first-ever credit card produced was the America express. All other credit cards, such as visa MasterCard and chase, came later on. The high status meant that Costco was different from other shopping brands such as wall art. It was unique for them. They wanted to portray different from all other brands. Several such brands in the united states f America and Costco wanted to do something different, and it has always [ushed the plan of becoming more prosperous by showing how unique they were. Thus, there is a vast difference between the prices of items compared with other brands.

They chose American Express credit cards because it has a stature. Furthermore, it was the first-ever credit card introduced in the United States of America. The American express came out on the first of October 1958. Costco started in 1983, so it decided to use those times the most famous credit card. They then got stuck to it and only accepted American Express credit cards. These cards gave a historical meaning to Costco. Moreover, it was not used by any other market brand, so Cosco stood out by accepting the American Express credit cards.

A sense of patriotism towards the united states of America:

Most might be confused about this statement, so allow me to explain using all the facts. First of let us touch on the history of the united states of America. America I place with people from all kinds of places, but they are all considered Americans because they unite under one flag. The flag of the united states of America. Who also made Costco into a shopping brand to serve the people of the united states of America. Hence, they wanted to do everything in comparison with the united states of America.

They tried their best to be as patriotic as possible. Due to this reason, if you focus on the logo, you will notice that it is income Iran with the flag of America. Costco is not just Costco; it’s Costco wholesale. Costco is written in bright red, and wholesale is written in added blue color. If we analyze the3 flag of America, we will see that it is in cherry red and deep dark blue.

Moreover, the background in the flag of America is also in the color white. If people look at Costco’s location, we can say that it also has an experience in the color white.  All of this shows the patriotism they have for the country of the united states of America.

They have taken up other ways too to show their patriotism for the country. Due to this reason, they only accept credit cards from America express. The only reason behind it is that they have the name of America attached to it, and it was the first-ever credit card launched by the united states of America. Moreover, it is affiliated with the government of the united states of America. It is also a sign of help for the country in difficult times. Costco is very famous, and most people would love to buy newer credit cards such as America express. Now, most might wonder how buying American express credit cards helps the government of the united states of America.

Allow me to explain this so that people might understand the whole concept. When a person buys an American Express credit card, there are many money sections related to the actual cost. The first-ever benefit the government of the united states receives is the tax return. When a person buys an American Express credit card, a portion of that money will go on to the government of America’s united states in taxes. It would help out the government in running the issue related to forms. Furthermore, who can utilize the money for other needs such as buying new police gear or carrying out maintenance work in the city?

The united states of America have a categorized form of government, so the taxes collected in an area will be applied to that area. It is also another way of showing patriotism to the country of the united states of America. It is what makes Costco different from every other supermarket in the united states of America. Moreover, it has also gained Costco its position in the market. Maybe that’s the reason why it doesn’t face any such lawsuits. It may also be why it does not have any problems with the government of the united states of America.

It benefits Costco:

America expresses that credit cards are not regular credit cards that every other person in America’s united states uses. It is an extraordinary card. Costco was the very first supermarket company to make the use of American Express credit cards compulsory. Costco’s wholesale did a lot of promoting the agents of the united states of America, but it also expected something in return.

As a result, the American express credit card company provided Costco with a lot of benefits. Allow me to explain all these benefits to have a clear idea about the whole concept. As owning an American Express credit card was a sign of status, it allowed a user to enjoy the benefits that other people could not. There are some examples related to the benefits enjoyed by Costco wholesale.

The first benefit enjoyed by Costco was that they would receive a higher percentage of the returns. If a comparison is carried out with other credit cards, it will clear out the situation. If individual geo to shopping at any Costco outlet, they would receive  1 or 2 percent of the total amount in case the person paid by credit card. However, the condition would be that the person used a visa credit card or master card. If the individual site the same outlet and bought the same object using an American Express credit card, Costco’s money would be different. If who used an American Express credit card, Costco would receive three percent of the total price.

Let’s look at some numbers. If people purchase 50 thousand worth of products using American Express credit cards in a day, it will provide Costco 1500 dollars a day. Now when we multiple 1500 by thirty, we get 45,000 a month. We can say that Costco earns 45,0000 dollars a month without any struggle. Now let us further multiply them by 12. It would give us the number 540,000 dollars. Now we can say that only one outlet of Costco earns 540,000 dollars in a year just because they accept American Express credit cards. Who can use the money to make up for the salaries of the workers? Due to this reason, we never saw Costco running out of money or filing for bankruptcy.

It means that if more people use America express credit cards to pay, Costco will receive thousands of dollars in profits just because America says credit cards.

These types of privileges are not enjoyed by any other supermarket company in the united states of America. Moreover, America expresses credit Card came out with a new idea of increasing the customer base of American express. It troubles other credit card companies because the people who already had American express credit cards often carried out heavy purchases.

Moreover, Costco does accept other credit cards but for smaller payments. If you do not have an American Express credit card, you won’t purchase a dress worth 3000 dollars. The other credit cards are used for other smaller purchases because Costco does not benefit from them.

Furthermore, there was a change in market strategy. American Express credit cards introduced their gold and platinum credit cards.

Now other banks such as Citi and Chase started to follow in the footsteps and took out their credit cards to compete with the gold and platinum credit cards of American express. American express fired back and took out multiple strategies to target the middle class. It was because middle-class members were a lot in number, and they could increase their popularity by introducing different credit card schemes for them.

Now American express had two types of credit cardholders. The first one was the people who use American Express credit cards for all kinds of heavy purchases above one thousand dollars. The second type of customers all belonged to the middle class, so they will use America express credit cards for daily life purposes. Keep in mind that Costco will still receive 3 percent on every purchase.

Most might be wondering how this was beneficial for Costco wholesale. Allow me to explain so that you have a clear idea of the whole concept. Due to technological advancements, non-one carries around cash nowadays. Almost every citizen of the united states of America has a credit card of some sort.

Therefore, middle-class people would start using American Express credit cards for shopping little things at Costco, and hence it would provide Costco another source of income. Thus, we can say that Costco will enjoy the benefit of increased customers of American Express credit cards.

The relationship was beneficial for both companies. American Express got the support of Costco customers, and Costco got the support of American Express credit cardholders. Moreover, this relationship moved a step forward when American Express decided to give 10 percent to credit cards issued through Costco.

The above was all the reason why Costco accepts American Express credit cards only in the pot. However, things do not remain the same for eternity, and the business relationship between Costco wholesale and America express did not last for eternity. They do carry out one of two deals in years but do not have the same strong bond between themselves. Costco has moved on and has brought a change in its strategies to grow even more.

Is there any other credit card accepted at Costco?

Now, most might be wondering if only American Express credit cards are still used at Costco or not. Keep in mind that the strong relationship with American express was the past, and Costco has moved on. After 1999, other credit card companies emerged into the credit card market, but they did not recognize it. Who did not know these credit cards by any other person, so Costco did not pay any attention to them?

However, it is safe to say that credit card companies such as visa and MasterCard have emerged from the shadow of American express credit cards. Costco accepts only access and master card credit cards at their outlets. They have opted for the same business strategy as they had with American express. Moreover, they also enjoy the same benefits provided by the American express credit card company.

There are several reasons for this, and one of the reasons is that they provide better benefits. Costco receives more than 3 percent of the total product. They had a contract of 3 percent with American express. The other reason for this is that visa and master cards have much more customers. People are not charged any fee for making visa or MasterCard credit cards. Due to this reason, every people have visa and master cards. The rich use them for heavy purchases at Costco, whereas the middle class uses them to buy Costco wholesale’s daily life utilities. Moreover, the poor also use visa and master card credit cards to buy daily life stuff. When combined, all these categories give a great benefit to Costco and visa and master card credit cards.

What type of visa credit cards are used at Costco?

Chase sapphire preferred card:

The chase sapphire credit cards provide customers with a lot of benefits. People could earn up to 80 thousand bonus points if they spent 4000 dollars in the first three months.  Customers may receive 25 percent cashback if they avail themselves of services such as airline tickets, hotel stays, and dining using the credit card. Moreover, customers may also receive zero dollar delivery fee if they order stuff online using a credit card. The credit card company pays the delivery charges. It has an annual fee of 95 dollars.

Chase sapphire reserve:

The chase sapphire reserve card is beneficial as it provides 60 thousand bonus points by spending 4000 dollars in the first three months. Keep in mind that the purchases should be made using the chase sapphire reserve card. Moreover, it also provides a 300 dollars worth of air travel reimbursement. The customers may also earn 3x credit card points after availing services such as airline services and delivery services. It is a bit expensive as customers have to pay an annual fee of 550 dollars to avail of the credit card.

Chase freedom unlimited:

If customers spend 500 dollars in the first three months, they will receive a cashback of 300 dollars. Moreover, they may also earn unlimited cashback worth 1.5 percent of every purchase. This card is beneficial for people who do not want to pay an annual fee as it has a yearly fee of zero dollars. Furthermore, the cashback rewards do not expire until the customer’s account is active.


The conclusion is that Costco had a  great strategic partnership with American Express. Still, now they have moved on and squeeze the great benefits of successful credit card companies such as visas and master cards.

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