Originally Posted by
bswiz
But I still don't get it (or maybe I just don't fully grasp how credit cards/banks all work).
AmEx seems equivalent to Visa or MasterCard.
So AmEx had an exclusive deal with Costco. Now Citi worked out some deal. If what you're saying is correct that ANY Visa will work (even non-Citi) it seems like Citi did all the hard work but Chase or any other Visa will benefit.
The confusion seems to be arising from the fact that Amex is both a bank and a credit card network.
Credit card networks include Visa, MasterCard, Discover, and American Express. They basically take care of the technology that allows your credit card to work. Typically one of these logos is on your credit card, and that is the network that the card will process on. Also when you walk into a store they'll usually have the logos in their window telling you which cards they accept.
But when you use your card, you are borrowing money from a bank aka credit card issuer. These include Citi, Chase, Bank of America, etc. Discover and American Express are both banks as well as networks.
The deal Citi worked out with Costco is that the new Costco credit card will be a Citi card. Costco also worked out a deal with Visa so that Visa cards can be processed at Costco. This was necessary to do, otherwise the Costco Citi card would have been useless if it didn't work.
Before, the issuing bank of the Costco credit card was American Express. The credit card network used by Costco was also American Express, and all American Express cards worked at Costco. Next year, the issuing bank of the card will be Citi and the network will be Visa. All Visa cards will work at Costco.