Costco won’t take American Express cards starting next year

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(Photo credit: FREDERIC J. BROWN/AFP/Getty Images)

ISSAQUAH, Wash. — American Express is ending next year a 16-year-old agreement with Costco Wholesale that calls for the exclusive use of its cards at the retailer’s U.S. stores.

The charge card company says it hasn’t been able to agree with Costco on renewal terms that make economic sense for American Express. The deal lasts until March 31, 2016.

American Express said Thursday morning that it charges Costco a significantly lower rate than the overall average it imposes on other retailers as part of the agreement.

“Taking a very disciplined approach, we began discussions on a possible renewal with Costco well in advance of the contract expiration,” said Kenneth I. Chenault, Chairman and Chief Executive Officer of American Express. “However, we were unable to reach terms that would have made economic sense for our Company and shareholders. Instead, we will focus on opportunities in other parts of our business where we see significant potential for growth and attractive returns over the moderate to long term.”

A company spokeswoman says a similar agreement involving Costco’s Canadian stores ended last year.

A Costco Wholesale Corp. representative did not immediately return a call from The Associated Press seeking comment.

Shares of American Express Co. dropped more than 6-percent Thursday, its largest one-day percentage decline since 2011, according to the Wall Street Journal.

The current agreements with Costco are set to end on March 31, 2016. Until that time, all American Express credit cards will be accepted at Costco warehouse stores in the U.S and on All co-branded cards from American Express and Costco can be used any place American Express cards are accepted through March 31, 2016.

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    • Ray F

      As it states in the article…”All co-branded cards from American Express and Costco can be used any place American Express cards are accepted through March 31, 2016.”

  • Brian Poage

    It will be somewhat of a change for me, As I use my card frequently at Costco, What will happen after March 2016? Will it be converted,cancelled, or still able to use it? I do use it for other things besides Costco.

      • Julia

        Joe you amaze me that you can get around only using an Amex! I have encountered many, many retailers that won’t accept Amex, even ones that advertise that they do, though I have never been denied using my Visa. I have to agree with others here that this can only hurt Amex and actually help boost Costco since it appears they will now accept other credit cards.

      • Howard

        Joe, I guess you don’t travel much outside US. AMEX isn’t accepted by a lot of retailers outside US. Even in Canada that is the close neighbor of US, 80% of the stores don’t accept AMEX. Visa and MasterCard only. My company credit card is AMEX and I hate to travel to Europe or Asia with it, ’cause a lot of times, I had to use my own Visa and MasterCard to pay bills.

  • Buddy

    Why would anyone want to pay Amex $75-250 a year for the privilege of using their card? In addition, they charge the merchant anywhere up to almost 10% plus a per swipe fee.
    Got rid of my Amex card years ago

  • Larry Eaton

    Good! , I didn’t like having to get a Amex card to join Costco in the first place and it was a pain in the backside dealing with Amex. I have good credit but it took me about three or four weeks to get approved in the first place because I had changed addresses. Good riddance, now I can cut up another credit card!

    • Bobby

      What a stupid ignorant you can be!
      Typical American idiot, if he cannot use his toy, he prefers to leave!
      Guess who’s winning here, genius!
      Yup, that’s right, Amex is winning, while you are losing, but hey, you love Amex!

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