CIBC® Costco Mastercard®: New Credit Card Partnership

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

Here's something you probably already know if you are one of the Canadians who own a Costco Capital One Credit Card. As of March 4, 2022, Capital One is no longer a part of Costco. CIBC has partnered with Costco to now bring you the 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 should have also received a hefty rewards cheque in January from Capital One that you could turn in at Costco for cash.

When Did the Change Take Place?

On March 4, 2022 CIBC acquired the entire Canadian Costco Capital One credit portfolio of over $3 billion in outstanding balances. If you had an outstanding balance on your Capital One Costco Mastercard, no need to worry! That balance has been seamlessly moved to your CIBC® Costco Mastercard®.

Your 16-digit number, PIN, CVV and expiry date have all been transferred over to CIBC.

Here's What You Need To Know

CIBC has done an exceptional job of ensuring that that Capital One Costco Members did not experience any interruptions in their shopping experience. Here are some important pieces of information about the transition, and you need and need not do.

• You have automatically begun to receive all of the new CIBC benefits as of March 4, 2022, even if you have still been using the Capital One card.
• Your new CIBC Costco Mastercard is scheduled to arrive in the mail before August 31, 2022
• Activate your card the moment you receive it. The instructions will be on the sticker.
• The first time you use your new card, you will required to enter your PIN. Tap may be used after that. Note that CIBC will randomly require you use your PIN for security purposes.
• As of the last day of August 2022, it's important to know that you should be making payments to CIBC, not Capital One. If you have been making payments to Capital One, payments have been rerouted to CIBC. At the end of August however, they will not be
• Do add your CIBC Costco Mastercard to your payee list. This always makes payments seamless.
• Learn about the features and benefits of the card to maximize your Costco shopping experience.

Features and Benefits of the CIBC® Costco Mastercard®

In a 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."

CIBC has enhanced 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.

Your new CIBC® Costco Mastercard® will feature:

• Cash Interest Rate - 21.49%
• Purchase Interest Rate - 19.75%
• No charge for additional card holders
• $0 Annual Fee
• 3% Cash back at restaurants and Costco gas
• 2% Cash back at other gas stations and Costco.ca
• 1% Cash back on all other purchases, including the ones you make at Costco

CIBC Pace It™

Another added benefit and quite possibly the most attractive of the CIBC® Costco Mastercard® is the CIBC Pace It™ Installment Plan. Now, clients have the option of making larger purchases, but paying them off at much lower interest rates which have been uniquely created for CIBC® Costco Mastercard® holders. CIBC Pace It™ makes is easy to budget your spending with far more flexibility than the average payment plan. Based on your credit rating, you have the ability to create multiple installment plans. On eligible Costco products you can now:

• Spread payments over a fixed term
• Incur no installment fees
• 4.99% - 6 months
• 5.99% - 12 months
• 6.99% - 24 months
• No credit checks required
• Earn rewards on converted purchases

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!