There are a few quirks to the Costco experience that all regular shoppers know: bracing for an icy chill when entering the walk-in dairy section, packing your items in miscellaneous boxes instead of bags and handing over your receipt to the employee with the marker at the exit.
Costco also has a strict payment rule that shoppers rarely encounter anywhere else in 2026. If you want to pay in-store with a credit card, you must use a card that runs on the Visa network.
“As far as I’m aware, they’re the only significant retailer that only accepts one credit card: Visa,” says Eric Grover, principal at Intrepid Ventures and a former Visa executive.
This exclusive credit card arrangement isn’t new, and Costco customers are largely used to it. But do you know the history — and, crucially, how to get around it?
Why does Costco only accept Visa credit cards?
Before Costco was exclusive with Visa, it had a deal with American Express. That meant from 1999 to 2016, Costco accepted only American Express credit cards, and its co-branded credit cards were Amex cards.
After exploring its options for a better deal, Costco entered into a credit card agreement with Citi in February 2015, committing to a 10-year initial term from the 2016 launch date. In 2024, Costco extended the Citi agreement through June 2029.
“Under the terms of the Program Agreement… Visa U.S.A. Inc. would replace American Express as the credit card network for Costco in the United States and Puerto Rico,” Costco’s 2015 Form 10-K said.
The breakup was a big deal at the time. When American Express announced it wasn’t continuing with Costco, its stock fell more than 6%, recalls Aaron Klein, a senior fellow at the Brookings Institution and a payments expert.
“That’s a market reaction as to how profitable that deal was for Amex,” he says.
The complex deal that replaced it led to Citi buying American Express’s Costco credit card portfolio and issuing its own Costco credit cards. Citi currently offers the Costco Anywhere Visa Card, which is designed for everyday consumers, and the Costco Anywhere Visa Business Card.
The 2015 Form 10-K filing also revealed that Costco would earn revenue from royalties when Costco credit cardholders used their cards at all other stores, partially funding the cash back rewards.
But unlike American Express, Citi doesn’t have its own payment network, so Visa was also at the table for these negotiations.
How Costco’s Visa exclusivity works
Citi issues credit cards on the Visa network, and Costco wanted to remain exclusive with a single network for credit cards when it switched to Citi for its co-branded cards. By committing so much business to the Visa network, Costco can negotiate lower swipe fees than other retailers. This helps Costco charge affordable prices, which in turn grows its membership base.
The exclusive credit card acceptance arrangement it has with Visa does not require shoppers to have a Costco credit card or even a Citibank credit card. Any Visa will do.
“Costco is trying to lower the cost they charge at the register by lowering the interchange fees they pay by signing an exclusive relationship,” Klein says.
The math clearly shakes out in Costco’s favor, experts say, or the company would have pivoted by now. But if exclusive deals can lead to ultra-low swipe fees, why don’t more companies have them?
“It works because the economics of Costco’s business model are structurally different than almost every other major retailer in America,” Klein adds.
Costco is in a unique position because its customers are paying members who typically shop at the warehouse club multiple times a month, loading up large carts with bulk items to feed the whole family. Costco shopping is a routine, and the low prices are key to many households’ budgets.
Because Costco customers are so loyal, they’re willing to work around the Visa exclusivity. That’s evident in the many Reddit threads in which Costco customers are looking for Visa credit card recommendations for this exact reason.
But shoppers shouldn’t expect this to be a trend they’ll spot at other stores.
“The rule of the 12 to 15 million merchants in the U.S. is that you accept all the major credit cards: Discover, Visa, Mastercard and American Express,” Grover says.
Merchants don’t want to lose sales, and sacrificing even 5% of sales because of an inconvenient credit card policy would more than offset all the possible savings. Costco, however, is different. And though the company didn’t reply to a Money request for comment on the payment policy, it almost certainly benefits.
Retailers typically pay network fees to a company like Visa, a markup to the processor and a larger interchange fee to the bank that issues the card. Added together, Costco’s fees are among the lowest.
“They get the best — the lowest — acceptance cost for credit cards of any merchant in the United States by far,” Grover says.
How to shop at Costco without a Visa credit card
Costco’s Visa exclusivity applies only to credit cards. Don’t have a Visa credit card? You can still pay with debit, cash, a check or another method.
Costco also accepts Costco Shop Cards, which can be purchased at Costco.com. Costco.com accepts Mastercard credit cards along with these other payment methods.
Another “hack” is using a non-Visa credit card elsewhere to buy a Visa gift card, which Costco will accept. In online communities, some users report earning rewards for Costco Shop Card purchases and Visa gift card purchases.
However, policies vary by issuer and some credit card companies classify gift card purchases as cash advances, so check your card’s policies before trying this at home.
