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As many people know, Costco Wholesale Corp. (NASDAQ:COSTB) will switch from longtime credit card partner, American Express Co. (NYSE:AXPC) to Visa Inc. (NYSE:VD) toward the end of June this year.

Costco’s popular co-branded TrueEarnings card from American Express will be replaced by a new Costco Anywhere Visa by Citigroup Inc. (NYSE:CB). With the move Costco will also now accept any Visa card, not just the Anywhere Visa from Citi.

That’s the simple part. What it all means for consumers and for investors is a little more complicated.

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For Consumers

Costco members will gain with the switch for several reasons. First, since Visa is accepted more places than American Express, customers who have the new Anywhere Visa will be able to use their cards more broadly than they could their American Express TrueEarnings cards.

Second, the current American Express rewards program gives customers 3% back on gas purchases up to $3,000. The new Visa card gives back 4% up to $7,000. The rest of the rewards program with Anywhere Visa is also better than that offered with the current American Express Card.

Finally, since Costco will accept any Visa card, customers with other Visa cards will now have a credit card option with Costco, something they did not have in the past.

For Costco

The move is expected to be good for Costco, which UBS said could bring in an additional 2 million members. The number of Costco numbers increased last year by 6% to more than 81 million.

Also, since the rewards earned by using the new Visa card come in the form of a certificate that can only be redeemed at Costco (for merchandise or cash), Costco is pretty much assured it will maintain its loyal customer base and keep customers coming back to the warehouse.

For Visa And Citigroup

The switch could also provide a boost to Visa since in addition to Costco branded Visa cards, the warehouse club will accept any Visa Card. On the plus side for Citigroup that also includes other Citigroup Visa cards. It does not, however, include other types of Citigroup credit cards, i.e., MasterCard Inc. (NYSE:MAC).

Those rewards, which are among the best offered anywhere will also be a boost for both Visa and Citigroup since they are likely to attract more customers – especially those who are already Costco members.

Costco members, by the way, tend to be affluent, use their cards frequently and make large buys at Costco. All of that is plenty of justification for the higher rewards being offered.

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For American Express

At the time the switch was announced, Ken Chenault, American Express CEO said losing the partnership with Costco will likely eat into company earnings and impact 1 in 10 Amex cards. Recently, on an earnings call, Amex CFO, Jeffrey Campbell said company profits would fall in the second half of this year.

The company beat analysts’ estimates last week with EPS of $1.45, ahead of the $1.33 that was anticipated by Wall Street. Amex stock, however, has fallen nearly 20% since the breaking up of the Costco relationship was announced.

One bright spot: American Express expects next quarter EPS to be higher due to a $1 billion gain from selling the Costco portfolio to Citigroup.

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