Costco names Citi, Visa as credit card partners

March 02 23:16 2015

Costco Wholesale identified Citigroup and Visa  as its new credit card partners Monday, naming them as the corporate successors to the popular membership company’s American Express (AXP) agreement that’s set to expire next year. Citi, the world’s largest issuer of consumer credit cards, would become the exclusive issuer of Costco’s co-brand credit cards starting April 1, 2016, the company said.

Visa would replace American Express as the credit card network for Costco in the U.S. and Puerto Rico on the same date, Costco said. American Express has been Costco’s exclusive credit card partner since 1999. Implementation of the agreements is subject to Citi’s purchase of the existing co-brand credit card portfolio, Costco said.

“Once issued, Costco’s co-brand Visa credit card would provide generous rewards to Costco members, serve as the Costco membership card, and would be accepted at Costco locations in the United States and Puerto Rico,” Costco said. Financial terms of the agreements were not disclosed. However, Costco said it would provide additional information to its members in the coming months.

Exclusive credit card deals with Costco are widely viewed as lucrative for both partners. The cards are the only credit payment accepted at Costco’s 474 warehouses in the U.S. and Puerto Rico. Additionally, many Costco members’ accounts are linked to their card and require only one annual payment for the co-branded card and Costco membership. Costco shares were up fractionally in Monday morning trading at $147.95. Shares of Citigroup were up fractionally at $52.79. Visa shares were up nearly 1.5% at $275.30. And American Express shares were up fractionally at $82.15.