CIBC Costco Mastercard: New Credit Card Partnership

Posted on September 24, 2021

Here are some fun facts about Costco that you probably didn't know:

  • There are 102 Costco stores in Canada and 795 Costco stores worldwide
  • Costco was founded in 1983
  • Costco sells 5.3 million pumpkin pies annually worldwide
  • There are 94.3 million Costco members worldwide

Here's something else you may not know if you are one of the Canadians who own a Costco membership: that pretty blue Capital One Costco Mastercard you're carrying around will soon be replaced by a CIBC Costco Mastercard.

Costco Executive members love those cash-back cheques they receive every year. As an Executive member with a Costco Mastercard, you receive two cheques annually. The first cheque is from Costco with their 2% Executive member rewards.

If you skillfully and frequently wielded your Capital One Costco Mastercard, you also received a hefty rewards cheque in January from Capital One that you could turn in at Costco for cash.

That pretty blue card will soon be a thing of the past as the Capital One and Costco partnership dissolves. Soon you'll have to switch to CIBC Costco Mastercard.

cibc costco mastercard new partnership

When Does the Change Take Place?

Our own Canadian CIBC will soon be partnering with Costco to offer you a new rewards Mastercard.

CIBC is acquiring the entire Canadian Costco credit portfolio of over $3 billion in outstanding balances. If you have an outstanding balance on your Capital One Costco Mastercard, no need to worry! That balance will be moving seamlessly to your CIBC Costco Mastercard.

According to CIBC, in early 2022 they'll be rolling out the brand new Mastercard made specifically for Costco. We don't have an exact date yet but we know that they'll be keeping us updated about the changes. Once your new CIBC Costco credit card arrives in the mail in early 2022, you need to retire your Capital One Costco Mastercard.

Do We Know What the Benefits and Features Are Yet?

The simple answer to this question is, "no, we don't know the Costco Mastercard benefits and features of the new CIBC version." 

We do know that in a recent press release CIBC's Joe Portera, Executive Vice President stated his belief that "CIBC is well-positioned to help drive even more benefits of a Costco membership to Canadians."

We also know that they will be enhancing offerings over and above the ones your Capital One Costco Mastercard offered. These include, "leading digital capabilities" according to Pierre Riel, Country Manager, Costco Canada.

We have it on good authority one of the CIBC Costco Mastercard digital capabilities will be that iPhone's Apple Pay will be supported by this new version. Apple also reports that Google Pay will also be supported. That means Android Pay might also be supported.

Another thing we know is that CIBC works hard to provide top-quality credit cards since they made it to Insurdinary's "Best Cash Back Credit Cards in Canada" list.

CIBC Costco Mastercard Features We'd Like to See

As CIBC picks up the baton from Capital One, they need to ensure they're offering top-notch features in order to maintain Costco customer fealty. We'd like to suggest a few to continue and a few new ones:

  • Continue with no annual fee, price protection, travel assistance, and zero liability
  • Increase grocery purchase cash-back to 4% similar to the Scotia Momentum Visa Infinite
  • Offer $1000 insurance on mobile devices and $1500 on travel cancellation similar to the Scotia Momentum Visa Infinite
  • Reduce the APR to 11.9% similar to the HSBC +Rewards Mastercard
  • Increase gas cash-back to 3.35% similar to the BMO Eclipse Visa Infinite

Of course, these are just some features we'd like. It will be up to CIBC and Costco to negotiate the features that will best meet everybody's needs. Our best advice to you is to keep checking back on Insurdinary's blog as we will continue to update you with the information about what to expect.

Costco and Capital One Mastercard

Why the Costco and Capital One Partnership Failed

The Costco Capital One Mastercard had many exclusive features. One of the main Costco Mastercard features was that it could be used anywhere that accepts Mastercard payments. This is unlike many store credit cards that are used exclusively at their store.

There were also no limits on the rewards you could collect annually. You also had price protection and zero liability features. The absence of an annual fee for using the card was also a big bonus along with the flat APR of 19.75% for all transactions.

So, why did the Capital One and Costco partnership fail? In a recent Insurdinary blog post, it appears that Capital One had several reasons for pulling out of the deal.

One reason for Capital One to dissolve the partnership - and probably the most important one - was that it wasn't making them enough money. Capital One needed to build up their customer base from scratch for their Costco Mastercard program because the previous partner, American Express, simply kept their customers without transferring them to Capital One.

Capital One also appears to be withdrawing from Canada. They have now closed their Montreal and Toronto call centres and appear to be pulling back from the Canadian market.

Canadian Banks are competing strongly with Capital One and other foreign credit card providers by offering many high-quality, low-cost, high return credit cards. Some examples of these are the Scotiabank Tangerine Mastercard with 2% cashback on any two categories of purchase of your choice, or the TD CashBack Visa Infinite with 3% on grocery, gas, and recurring bills.

Capital One also seems to want to focus on its own brand credit cards. That's a reasonable choice for them since they didn't get any benefits when Costco members used their Capital One credit card at Costco.

Choosing the Best for Your Family

As Costco migrates from the Costco Capital One Mastercard to the CIBC Costco Mastercard, you can simply wait to get your new card in the mail. We already know that CIBC is promising some great benefits and features, so that might be a good choice.

Alternatively, you might want to shop around for a credit card that has all the specific features you and your family need. You can go to Insurdinary's credit card comparison tool and find one you like even better! Check it out today!

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