When Costco moved its longstanding store-branded credit business to Citigroup, it banked on better customer perks to ease the transition. It was a bumpy road, however, as cards were sent out late and customers had trouble activating them.
Two years later, those issues have been resolved and Costco executives say the business is as robust as ever. But Walmart is unlikely to provide the level of incentives that a Costco card does, which include cash back on gas, restaurant and travel spending. Walmart’s customers are generally less wealthy and much older than Costco’s, and many don’t even have a checking account, much less a credit history.