Car insurance costco american express

Q: Costco is changing the credit card it accepts from American Express to Visa by Citi in the next couple of months. I most likely will not use the Costco American Express card any more, because I always used it for my Costco purchases. I have a MasterCard already and with the new Visa, I feel is enough for me. I no longer need the America Express card. My concern is, if I cancel or don't use the American Express card, how will it effect my credit rating?

My credit score is always in the 800's and I would not want to lose my excellent rating.

A: First, it's not yet clear who will receive new Costco Visa accounts and who won't.

In some cases, your AmEx account will be transferred automatically to the new Visa account. In other cases it won't. And if Visa, AmEx and Costco want to transfer your account to a new Visa card, maybe you think you don't want it because you already have a Visa that you'll be able to use at Costco.

The bigger question here: You should almost never keep a credit card that you absolutely don't want and won't use. It's silly to pay an annual fee or have an account that you need to waste your time babysitting, in order to guard against fraud.

There are a few cases when you should keep a credit card, at least temporarily, such as if:

  • You have anything less than a B-plus credit rating (roughly a 690 on the traditional FICO scale).
  • You are planning to buy a home or refinance your mortgage in the next year.
  • You plan to put in any other kind of credit application in the next month, such as for an auto loan or student loan.
  • You have only two or three credit cards and you are carrying sizable balances on your other cards relative to their limits. Remember, even if you pay off your balance every month, the balance on your statement counts as a balance.

  • On this last point, if you had two $5,000 credit cards and had $2,000 balances on each, that would mean you're using 40 percent of your available credit. That's not so good. Not horrible, but not good.

    But if you had three cards with $5,000 credit lines (meaning $15,000 in available credit) and a total of $4,000 in balances, that would mean you were using about 27 percent of your available credit. That's much closer to the goal you should have (which is about 25 percent). This shows why you may want to avoid closing that third account.

    Murray is The Plain Dealer's personal-finance writer. Because of the volume of requests, she cannot help everyone who contacts her.

    If your American Express card is not automatically transferred to the new Visa account and you chose not to use the AmEx card, it would not hurt you. It would actually help you. If you wanted to keep the account open, you should make sure to use it every four to six months to keep it active and make sure it doesn't get closed against your wishes.

    Remember that closing a credit card account never improves your score. Ever. It may cost you a few points, dropping your credit score from, say, 820 to 810. No big deal. If your score is that high, the 10-point difference is just for ego. But if your score went from 660 to 645, that could be significant.

    For those unaware, Costco last year announced it's stopping its relationship with American Express and will no longer accept AmEx cards. Starting June 20, Costco will only accept Visa credit cards, Visa and MasterCard debit cards, as well as cash, checks EBT and Costco cash cards. You don't need to do anything to apply for the new Costco Visa card.

    Your question about what to do may be a moot point. American Express or Citibank may make the decision for you. AmEx says that, for some, your account won't be transferred to Citibank Visa and your card will be replaced with a different, non-Costco branded credit card from American Express. You may or may not want this AmEx card.

    Even if your AmEx account is transferred to Citibank Visa, you may already have a Visa. You may or may not want another one.

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