Costco U.S. accounts for 8% (10% worldwide) of spending on American Express cards overall right now but it appears the agreement will end on in 2016. Warehouse club retailer Costco Wholesale Corp will stop accepting American Express credit cards after a 15 partnership at U.S. stores and the loss of Costco would reduce spending on AmEx cards by about $80 billion a year, including their use at businesses other than Costco’s 468 stores in the United States and Puerto Rico.
Competition in the co-branded card business has intensified in recent years. Capital One Financial Corp and MasterCard replaced AmEx as Costco’s card partner in Canada, raising speculation that the companies could also replace AmEx in the U.S. I would bet that American Express will move into Sam’s Club because of their relationship that exists with Bluebird in Walmart stores nationwide. Costco may take the Mastercard away from Walmart and the wholesale wars may heat up with lots of offers for us to switch cards while they start up new contracts.
American Express renewed co-branded contracts with Delta Airlines, Starwood Hotels & Resorts Worldwide and Cathay Pacific Airways in 2014. While Costco caters to relatively higher-income customers than WalMart and Target you will find American Express cards in both these chains under the Bluebird brand.