Image source: Wikimedia Commons.

The long relationship between Costco (COST -0.35%) and American Express (AXP 1.03%) is coming to an end next month with the introduction of a new co-branded Visa (V -0.47%) card that will take its place. How will the change impact members of the warehouse giant? Here are five things you need to know.

1. When will the change go into effect?
The new Costco Visa card will go into effect on June 20. Starting on that day, you'll be able to use the card not only at Costco but also anywhere else Visa cards are accepted.

As a corollary, your American Express card should stop working after June 19. At that point, the card will no longer be valid.

2. What do you need to do?
Current holders of the American Express co-branded card don't have to do anything in order to apply for and receive the new Visa card from Citigroup (C 0.27%). The latter will be mailed between the end of May and early June. There will be directions on the card to confirm you've received it.

One benefit to not reapplying for a new card is that your credit report won't be pulled. This is good for consumers because credit pulls have a negative impact on your credit score, which in turn dictates whether or not you qualify for loans in the future as well as the interest rate you'll have to pay.

The one thing you may need to do is transfer automatic payments that are tied to your American Express over to the new Visa. Along the same lines, if your American Express bill is paid automatically out of your bank account, you'll need to set up autopay for your new card.

Image source: iStock/Thinkstock.

3. Will the new Costco rewards card be better?
Yes. The main reason Costco is switching its cobranded relationship from American Express to a Visa card issued by Citigroup is because the rewards for its customers will improve.

Users of the American Express TrueEarnings card earn 3% cash back on purchases of gasoline, 2% cash back on travel and restaurant spending, and 1% cash back on everything else. The new Visa card raises all but the last tier of cash-back rewards.

According to Citigroup's website, cardholders will earn:

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases

4. Any additional benefits?
The Visa card offers multiple additional benefits beyond the four-tiered cashback reward program. Beside the fact that Visa cards are more widely accepted around the world, the new Costco Anywhere Card provides:

  • Access to Citi Private Pass, which gives holders special access to purchase tickets to the concerts, sporting events, and more.
  • Extended manufacturer's warranties on purchases made with the Costco Anywhere Card.
  • Damage and theft protection that covers the cost of repairs or a refund if purchases made with your new card are damaged or stolen within 120 days of purchase.
  • Worldwide car rental insurance that protects you against theft or damage to a rental car when you pay for your rental with your Citi card and decline the rental company's collision loss/damage insurance.

5. What will happen to your American Express account?
Your American Express account will be automatically closed. This means the card will stop working after June 19.

The good news is that any balance on your American Express co-branded card will transfer automatically to the new Visa card on June 20. The same is true of previously earned cashback rewards. Accrued rewards that were not previously distributed will be transferred automatically to the new card. As a result, when you receive your cashback rewards coupon in Feb. 2017, it will include cashback rewards earned on your Costco card from American Express during the first half of 2016.