For the last 16 years, Costco and American Express have been partners in an exclusive relationship. But last week Amex announced that they are breaking up with Costco after failing to come to terms on an extension to their exclusive agreement.
So what does the high-profile breakup mean to you?
Effective March 31, 2016 Costco will no longer accept American Express cards at any of its locations. For years, Amex was the only credit card accepted by Costco and some shoppers only opened an account with American Express to make shopping at Costco easier. Walk into a Costco warehouse in April 2015 and you’ll find that your Amex card is useless. You can still use cash or debit cards though.
Costco will likely start accepting a different credit card. Nothing has been announced yet, but you can bet that other credit card providers are lining up to replace American Express as Costco’s dance partner. It is expected that Costco will reach another exclusive arrangement with either Visa, MasterCard, or Discover but we’ll have to see how things shake out in the coming days and weeks.
The co-branded American Express True Earnings card from Costco will be useless. You still have a little over a year to earn some rewards with the card but after that you’ll need to find another option. Amex has already said that they’ll offer True Earnings cardholders an alternative card but details have yet to be announced.
As for a new co-branded card, when Costco Canada’s agreement with American Express expired in 2014 they replaced it with a Capital One Mastercard and started accepting MasterCard at all warehouse locations. Expect a similar arrangement between Costco and a major credit card to be announced in the coming days.
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