Costco will no longer accept Discover Cards for online payments at Costco.com. The wholesale giant revealed the news in a message to members about the changes – which will take effect after November 15, 2023 – and seeks to streamline further which credit cards you can use at its locations.
Costco Makes Changes to Online Payment Options
Costco is notorious for its strict rules regarding credit cards – specifically which ones you can use at its stores. Now, customers will feel the pinch even more thanks to an upcoming restriction to the Discover payment network.
Effective November 15, 2023, Discover credit cards will no longer be accepted as a payment method for purchases made at Costco.com, the wholesale club’s online presence. The website previously accepted Mastercard, Visa, and Discover credit cards, leaving just two networks. Further, Costco physical stores and gas stations don’t accept Mastercard, with Visa and the Costco Store Card as your only real credit card payment options.
Here are the payment methods currently accepted across Costco locations:
| Costco stores | Costco gas | Costco.com | |
|---|---|---|---|
| Visa | ✅ | ✅ | ✅ |
| Mastercard | ❌ | ❌ | ✅ |
| American Express | ❌ | ❌ | ❌ |
| Discover | ❌ | ❌ | ❌ |
| Debit | Most PIN-based cards | Most PIN-based cards | Most PIN-based cards |
| Check | Current member | ❌ | ❌ |
| Cash | ✅ | ❌ | ❌ |
| Other | Traveler's checks, mobile payments, EBT, store card | Store card | Store card, Visa click-to-pay |
Why Costco Prefers Visa Over Others
Costco uses the Visa payment network for a few reasons. First, because Visa charges the lowest interchange fees for a card payment network. These fees are charged between banks for accepting card-based transactions, with Visa charging around $1.50 in fees on a $100 Visa credit card purchase. But Costco likely has a deal even better than this – about $0.40 on $100 purchases – and it passes those savings on to you, the customer.
Second, by removing the other expensive payment networks, the wholesale club and retailer can reduce the prices it charges to its members – already lower than average thanks to these clubs’ wholesale/bulk buying practices.
Finally, Visa is the preferred payment network of Costco stores because Costco offers a few co-branded retail credit cards backed by the Visa network. The cards, issued by Citi, are the following:
 Costco Anywhere Visa® Card by Citi |
 Costco Anywhere Visa® Business Card by Citi |
|
| Card type | Consumer | Business |
| Annual fee | $0 | $0 |
| Rewards | 4% cash back on eligible gas and EV charging purchases for the first $7,000 per year and then 1% thereafter, 3% back on eligible travel and dining, 2% back on all other Costco purchases, and 1% on all other purchases | 4% cash back on eligible gas and EV charging purchases for the first $7,000 per year and then 1% thereafter, 3% back on eligible travel and dining, 2% back on all other Costco purchases, and 1% on all other purchases |
The Costco Visa credit cards also act as your membership card, meaning you don’t need to worry about extra plastic in your pocket or purse.
Related Article: The Best Credit Cards to Use at Costco
Featured image by tokaijiru/PixaBay
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