Deal DetailsLast Edited by fargoadvice February 12, 2015 at 08:49 AM
Quote :Shares of American Express (AXP - Get Report) were falling 7.3% to $79.73 in pre-market trading Thursday following the announcement that Costco Wholesale (COST) will stop accepting the company's credit cards in April 2016.
Costco will stop accepting American Express cards next year because the two companies were unable to reach terms on a renewal of their current co-brand and merchant acceptance agreements. The current agreements between the two companies will expire on March 31, 2016.
No, this does not mean that Costco is going all cash or food stamps or Bitcoin only.
In April 2016, they stop accepting AmEx and will end up accepting Visa/MasterCard instead, and another bank will likely issue a co-branded rewards card like the current AmEx Costco card. This happened in Canada already.
Just like you can use a non-Costco Amex today, after April 2016, you will also be able to use a non-Costco Visa/MC card once they switch (i.e. if you don't want to open a new Costco rewards Visa/MC at the moment).
I will be watching to see if the rewards terms change with the new card. I kind of like being able to use Visa/MC since there may be other rewards options from other cards that may be advantageous to use, even if only temporarily.