Costco strikes credit card deal with Citi, Visa


1 photo
Save Story
Leer en español

Estimated read time: 1-2 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

NEW YORK (AP) — Costco says it struck a deal for Citi to be the exclusive issuer of its co-branded credit cards, with Visa replacing American Express as the card network.

The deal is subject to Citi buying the company's co-branded credit card portfolio, Costco said.

Costco and American Express ended their partnership after failing to reach an agreement on renewal terms. American Express said earlier this month that the relationship, which goes back 16 years, is set to expire March 31, 2016. Costco says the deal with Visa and Citigroup Inc. would take effect the next day.

The deal means that Visa will be the only credit cards accepted at Costco stores. Currently Costco accepts only American Express credit cards, though it takes debit cards from other companies including Visa and Mastercard.

The company said it would provide its customers with information about the transition in coming months. David Sherwood, Costco's director of finance and investor relations, said in a phone interview it was yet to be determined if people will have to reapply for their Costco rewards cards.

Costco uses the exclusive deal to lower the credit card processing fees it pays. Processors typically charge retailers more for credit transactions than for those on debit cards.

Costco Wholesale Corp., based in Issaquah, Washington, has 474 locations in the United States and 88 in Canada. It is the world's second-largest retailer by revenue, according to the National Retail Federation.

Shares of Visa Inc. rose $5.12, or 1.9 percent, to $276.43 in early afternoon trading. Costco's shares rose $1.28 to $148.24.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos

Most recent Utah stories

Related topics

BusinessUtah
The Associated Press

    STAY IN THE KNOW

    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the KSL.com Trending 5.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast