Costco's New Visa Card Rollout Off To Rocky Start

(RTTNews) - Costco Wholesale Corp.'s (COST) switch from American Express to Visa credit cards was expected to be smooth, but it appears to have got off to a rocky start and also proved to be painful to customers.

The Costco Anywhere Visa Card by Citigroup Inc. (C) was rolled out this Monday after Costco ended its 16-year partnership with American Express Co. (AXP) last year.

Costco said that as of June 20, 2016, it has begun accepting all Visa credit cards both in the warehouse and at Costco gas stations in the U.S. and Puerto Rico.

However, angry customers flooded Costco's and Citigroup's social media sites with complaints about having trouble activating their new Costco credit cards and about not being able to pay existing balances that were transferred to the new cards. Some of them also complained that they have not got their new cards.

"Due to high levels of interest in the Costco Anywhere Card and high volumes of calls from cardholders, callers to Citi should expect longer than desired hold times. Citi is reviewing processes and pulling in additional resources to alleviate hold times," Costco said on its Facebook page.

A spokesperson for Citigroup apologized to customers who were inconvenienced and said the company had issued over 11 million cards to existing Costco members as well as received 1.5 million calls in the first two days alone.

"Due to the tremendous response, some customers experienced delays reaching customer service. However, call volumes are starting to return to normal," the Citigroup spokesperson said.

The new card is seen as offering improved rewards and benefits compared to the American Express Card. It also does not carry an annual fee.