AmEx-Costco Divorce, and What it Changes for Customers

AmEx-Costco Divorce, and What it Changes for Customers Photo (cc) by tellumo

Costco and American Express are splitting up, ending a 16-year partnership. Their exclusive agreement, in which Costco only accepted AmEx credit cards, will end March 31, 2016.

The decision was based purely on economics, according to Costco.

“Everything comes down to cost and saving money for our members, and that’s what it’s all about,” Bob Nelson, vice president of investor relations for Costco told The Wall Street Journal.

AmEx said the split would negatively impact its earnings for the next two years, “sending its shares down as much as 7 percent and wiping out about $6 billion of market value,” Reuters said.

“It’s not easy to see a long-standing partnership end, but when the numbers no longer add up, it’s the only sensible outcome,” AmEx CEO Ken Chenault said in a conference call with analysts.

Spending on AmEx cards will be slashed by about $80 billion a year, which includes use at Costco and other stores, as a result of the split, Reuters reports.

Costco won’t accept AmEx cards after March 31, 2016. If you have a co-branded TrueEarnings Costco-AmEx credit card, you won’t be able to use the card at Costco or anywhere else, the WSJ said. AmEx plans to offer its TrueEarnings card customers a different card.

Costco and AmEx recently ended a similar relationship in Canada, and Costco replaced its store-branded American Express card with a Capital One MasterCard.

“The company has reportedly been negotiating with CapOne and MasterCard to do the same for its U.S. stores,” Consumerist said.

What do you think of the AmEx-Costco split? Will it affect you? Share your comments below or on our Facebook page.

If you shop at Costco or other warehouse stores, watch this video to learn how they try to get you to spend more money than you intended:

Popular Articles

15 Smart Ways to Organize Every Room of Your Home
15 Smart Ways to Organize Every Room of Your Home

Are you sick of clutter and digging around to find things? Get your household organized with these brilliant and inexpensive tricks.

These 6 Lifestyle Changes Might Help Prevent Dementia
These 6 Lifestyle Changes Might Help Prevent Dementia

Science says these practices can lower the risk of cognitive decline as we age.

10 Food Staples That Are Easy and Cheap to Make Yourself
10 Food Staples That Are Easy and Cheap to Make Yourself

Making any of these key foods yourself will improve your meals and your budget — not to mention your health, in some cases.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments