Costco near deal with new credit card issuer

NEW YORK — Costco Wholesale Corp., acknowledging its split with American Express Co., said Friday that it is close to reaching a deal with a new credit card company for exclusive rights to serve the giant retailer’s customers.

Costco should be in a position to announce the new partner “probably sooner rather than later,” said spokesman Bob Nelson, raising the possibility that could happen as early as next week.

The company, based in Issaquah, Wash., east of Seattle, has been talking with several credit card firms for some time in anticipation of a break with AmEx, Nelson said. Last fall, Costco ended its partnership with AmEx in Canada, choosing instead a Capital One MasterCard.

Costco’s efforts to hook up with a lower-cost credit card company have rattled some of its U.S. customers.

“It’s the only reason I have an American Express card,” Tim Young said Friday outside a Costco store in San Juan Capistrano, where he had put his car through the store’s $7.99 carwash and picked up a few odds and ends inside.

As usual, Young said, his purchases included something he had not planned to buy — a pair of jeans he had decided, on the spur of the moment, that his teenage son could use — ratcheting the bill a bit higher.

For the last 15 years, AmEx has been the only credit card accepted at Costco, a membership-only business with 50 million discount-minded customers. The store otherwise accepts only cash or debit cards.

Under the exclusive deal, Costco also heavily marketed its own branded American Express cards to its members, though they were free to use other AmEx cards. Analysts said the relationship has been a boon to both, particularly the New York credit card company.

AmEx said Thursday that the relationship would end in March 2016 when its current 10-year contract with Costco expires.