American Express is set to end its exclusivity deal with Costco, one of the largest wholesale store chains which has 470 stores located across the United States, which possibly could end a long-standing manufactured spending opportunity.
Until now, Costco has had an exclusive agreement with American Express, whereby Amex is the only credit card accepted in-store. Costco also accepts MasterCard and Visa Debit Cards, however these are not considered credit cards, and also come with lower processing fees.
According to Fortune, American Express stock plummeted Thursday as the dropped exclusivity agreement was announced:
The credit card company’s shares dropped to around $80 in early trading and were recently trading down by about 6.7%, at $80.88. The steep decline erased roughly $5.9 billion from the payment card giant’s market value, which is still nearly $88 billion.
Costco stores in Canada also dropped a partnership with Amex:
Costco previously dropped AmEx as its exclusive credit card issuer in Canada and Bloomberg reported last fall that the retailer was considering making the same move in the U.S. The retailer negotiated a deal to partner with Capital One Financial Corp. in Canada. Shares of Capital One and MasterCard were each up roughly 3% on Thursday.
No word has been announced on what credit card Amex will offer in place of their Costco offering, or whether Costco will sign an exclusivity agreement with another major credit card company in place of Amex.
You’ll notice this post is vaguely worded, and doesn’t expressly say the specific travel hacking method that is ending. That’s on purpose. This post simply provides the information about the exclusive partnership ending between Costco and American Express. For more information on what this might mean for you as a savvy credit card holder, and frequent traveler, consider reading forums on FlyerTalk and MilePoint.
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