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The cessation of the cobranded Costco Wholesale Corp. credit card issued by American Express Co. moved another step closer with Monday’s announcement that Citigroup will buy the AmEx Costco portfolio for an unspecified sum.
Citi’s acquisition of the portfolio is expected to close this summer. That’s when Citi will begin to issue Costco cobranded credit cards bearing the Visa Inc. mark. Visa will then be the only general-purpose card brand accepted at the 488 Costco stores in the United States and Puerto Rico.
Costco accounted for 8% of AmEx’s worldwide card-billed business in 2014, about $81.8 billion. Costco also accounted for 10% of AmEx’s worldwide cards in force. AmEx expects to gain approximately $1 billion from the sale to Citi, though it cautions the final amount may vary.
AmEx says the exact date for the Citi takeover of the accounts will be announced later. On its Web site, AmEx says that, following the transaction, no AmEx Costco cobranded cards will work for any purchases. These Costco cardholders either will be migrated to a new Citi-issued Costco cobranded card or receive a new AmEx card for transactions at other merchants. The criteria for which card will be issued were not released.
AmEx disclosed in February 2015 that its merchant-acceptance and cobranded credit card agreements with Costco would not be renewed. The contracts originally were set to expire March 31, but have been delayed to accommodate the data migration.
