Here's The Reason Costco Only Accepts Visa Cards

Only Visa cards swipe right at the Costco checkout. This strategic decision stemmed from the warehouse chain's inability to come to renewal terms with American Express, its previous credit card proprietor, in 2015. For context, most credit card fees range from 1.5% to 3.5% per transaction. The botched Amex deal boiled down to one major factor: the cost of the merchant fee, which was 0.6% for every club member transaction. Although the cost was well below the national average, in the grander scheme, the Amex merchant fee did add up to millions of dollars in costs for Costco — about $180 million per year.

When Visa stepped in and made an offer, it was so low that it seemed too good to be true. Visa proposed a merchant fee of less than 0.4% — almost nothing — and Costco accepted. 10 years later, Visa still has Costco's credit card situation on lockdown, despite the increasing costs of goods.

If there's no Visa in your wallet, don't worry. Most Costco warehouses accept a variety of common payment forms (both physical and digital) at the register, such as cash, personal or business checks, traveler's checks, and standard debit cards. If you prefer to make payments using your watch or phone, Costco supports mobile payments (in the food court too) from Samsung Pay, Google Pay, and Apple Pay. Some Costco departments, including the pharmacy, hearing aid center, and optometry, accept Flexible Spending Account (FSA) debit cards and Health Savings Account (HSA) debit cards.

Payment options at the Costco gas pump are slightly different. Besides accepting Visa credit cards, most gas stations welcome debit cards, Apple Pay, and Costco Shop Cards. The Costco website accepts the same payments as the gas stations, with one slight anomaly: You can use a Mastercard credit card to make purchases through Costco.com. But that's about the only place a non-Visa credit card is allowed at Costco. (Unless you cross the border into Canada, where the Costco food court menu leaves us full of envy and Mastercard is the credit card of choice.)