CIBC to become exclusive issuer of Costco credit cards in Canada
Almost three months after striking a deal to become Costco’s exclusive credit card partner in this country, Canadian Imperial Bank of Commerce has unveiled details about what cardholders can expect when the plastic arrives in their mailbox next year – including at least twice as much cash back.
Starting in March 2022, when CIBC replaces Capital One as the issuer of Costco Mastercards in Canada, existing cardholders will start earning a slew of new benefits. In addition to new features such as mobile device insurance and access to CIBC’s pay-by-instalment service, cardholders will earn at least one per cent cash back on every purchase they make.
The cash-back percentage will range as high as three per cent for purchases made at restaurants and Costco Gas locations. The Capital One version of the Costco Mastercard offers 0.5 per cent cash back on the first $3,000 in charges and one per cent for spending above that threshold.
Costco has more than 10 million members across Canada, according to its website, though it is unclear how many of them are Costco Mastercard cardholders. Regardless of the exact figure, analysts believe CIBC’s main motivation for acquiring the card business is to bring the holders deeper into the bank’s suite of offerings.
“The real prize here for CIBC will be the cross-selling opportunities to millions of affluent card holders, only a small portion of which are current CIBC customers,” Scotiabank analyst Meny Grauman told clients in early September when the deal was announced.
Existing Costco Mastercard cardholders will be able to continue using their cards until they receive a new one from CIBC, which the bank said will be prior to Aug. 31, 2022.