Costco, deluged with complaints over Citibank's Costco Anywhere Visa cards

Costco Wholesale Corp customers posted hundreds of complaints about a new credit card from Citigroup Inc, which entailed lengthy wait times and involved problems with activating accounts.

Costco, the world's largest wholesale club, told customers that the bank was working to deal with a spate of calls about the new Costco Anywhere Visa cards, which were available for use starting on Monday.

''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,'' Costco said on the Facebook page. ''Citi is reviewing processes and pulling in additional resources to alleviate hold times.''

Costco terminated its 16-year relationship with American Express Co after the firms failed to agree on card fees. Costco's sales had fallen in recent months, disappointing analysts. Scott Mushkin, an analyst at Wolfe Research, wrote in a note to clients this month, one reason could be ''friction'' from the credit-card switch.

Costco shares were down 0.7 per cent to $157.03 in New York trading, the worst performance in the 36-company S&P 500 Consumer Staples Index.

One Costco customer said on the retailer's Facebook page that she was on hold for three hours waiting to talk to a Citigroup representative, while another said he was probably improperly billed for charges he already settled with AmEx.

According to commentators, a transition that executives promised would be seamless had ended up in a customer service fiasco.

Citigroup had logged over 1.5 million customer service calls, according to Jennifer Bombardier, a spokeswoman for Citigroup.

Many retailers offer branded credit cards, but Costco's credit cards come with special customer benefits. 

Costco stopped accepting new card applications in November and had been working on its card transition plan for over a year.

Citigroup worked hard over the last weekend to convert the millions of new cardholders it inherited onto its system.

''Citi completed one of the single largest portfolio conversions in history,'' Bombardier said. ''We sincerely apologize to those who have been inconvenienced.''