It was earth-shattering in the payments world when Costco ditched American Express as their co-brand card issuer and signed on with Citibank. Citi offered them an amazing deal that gives Costco nearly free credit card acceptance.

I’ve suggested that as costly as it was for American Express to lose Costco, it would have been more costly to retain Costco. As big a win as Costco is for Citibank and Visa, it’s a deal afflicted by the winner’s curse because Citi/Visa had to overpay to secure it.

Nonetheless, losing Costco was a huge deal for American Express since ~10% of American Express cards were co-brand Costco products. That’s nearly as many co-brand cards as American Express has with Delta, Starwood, Hilton, and everyone else combined.

Current Costco American Express cardmembers will automatically receive Citibank-issued Costco cards (Citi picked up American Express’ “back book”).

It turns out that we know more than this, even though Citi won’t start issuing the card until April 2016. That’s because as Doctor of Credit points out in “Leaked Details on Costco-Citi Credit Card Rewards”, the Citibank Costco credit card deal was filed with the SEC and is publicly available online.

Features of the new Costco cards are laid out in the document.

• They’re the same as the current Costco card from American Express
  
• Which is disappointing
  
• Because as huge a portfolio as this was for American Express, it wasn’t a very good consumer card.

It’s a no annual fee 1% card that bonuses travel and US restaurants (2%) and gas (3% on the first $4000 spend each year). The small business version of the card is the same but 3% gas is capped at $7000 in annual spend. Both cards require Costco membership to be eligible.

As a general cash back card, Citi Double Cash is much better. That’s a Mastercard though, and Costco will be accepting Visas (like Chase Sapphire Preferred and indeed nearly the entire Chase portfolio other than the IHG Rewards Club card).

The Citi Costco card won’t even be the best cash back Visa — the Capital One small business Spark Card offers 2% on all spend.

Nonetheless, the co-brand agreement makes interesting reading for those who want to learn what happens when a co-brand partner gets acquired, or acquires another business with a co-brand agreement for instance.