As Costco announced to replace its Amex card with Citigroup, American Express is predicted to lose its place as the leader in credit card sales. Chase will replace Amex in its place.
Since last year, Costco has introduced Citigroup and Visa as its new credit card partner. Costco's partnership with American Express will expire this year, and Costco decided to not renew the partnership. USA Today reported that American Express will sell its Costco-branded portfolio to Citigroup.
Citigroup was supposed to take over American Express card on April 1, but delayed due to some conditions into some time in June. At that time, all members of Costco will not be able to pay with American Express
Although an exact time is still waiting for official announcement, but according to American Express spokeswoman Elizabeth Crosta, American Express Costco cards will no longer valid once the transition is official. However, card rewards is still be available for the cardholders and the 2015 annual reward will also be paid out.
Costco is American retailer which provide a membership-only warehouse club. It is the largest membership-only warehouse club in the United States and provide a wide selection of merchandise. Its U.S. stores are located in 474 location, and also operated in Canada, UK, Australia, Mexico, Taiwan, South Korea, Japan,and Spain.
American Express was a leader in credit card in the U.S., and it market is shrinking along with declining popularity of its premium card nicknamed Black Card, or known formally as Centurion Card.
As Costco will leave Amex, according to Business Insider, Chase will take over as a leader in credit card sales volume. Partnership with Costco has given a $572 billion transaction for Amex, after the end of partnership, Amex will loss $80 billion to $492 billion. While Chase had $496 billion in sales volume.
In its quarterly report released in January, American Express reported a fell of profit by 39.2% and its stock stumbled 32% for the last 12-months. Afterward, the company announced $1 billion cost cutting plan.
Chief Industry Analyst at CreditCards.com Matt Schulz told Fox Business, "American Express used to be the undisputed champ of upscale credit cards for a long time. Now, there's a lot of competition coming after that crown."
End of multi-year-long partnership with Costco also followed by other partners. JetBlue decided to switch to Barclaycard and Mastercard after ten years of partnership with Amex. While partnership with Starwood Hotels is also at risk following the acquisition of Marriott in partnership with Chase.
In June, Costco will replace American Express to Citibank as its partner. The end of partnership will bring down American Express sales volume and Chase will take over Amex as leader in sales.
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