US Insights

Costco and American Express break up

Greg Flemming

SVP, Financial Services Group

Economy 02.20.2015 / 12:50

broken credit card

As the credit card exclusive ends, Lightspeed FSG data show what each brand stands to lose

Key Numbers

  • $1,500 Average spend per month on a Costco AmEx
  • 66% of Costco AmEx holders highly satisfied with the card

American Express has announced it will discontinue its exclusive agreement with the Costco Wholesale Club Stores, which have traditionally accepted only American Express credit cards. Costco is likely to enter into a new partnership agreement with another US card issuer. Lightspeed FSG behavioral tracking panel data spotlights what American Express is walking away from, and what a new Costco partner may have to gain.

The Lightspeed tracking data shows that the American Express Costco credit card, long a strong performer in the American Express portfolio, averages nearly $1,500 in spending per month with a solid mix of in-store and out-of-store purchases. The data, which are based on actual card spend among US consumers, also show that:

  • Costco credit cards are used for an average of four purchases at Costco stores each month, or about once a week. The average ticket size per purchase is about $79, accounting for more than $300 in Costco store spend each month.
  • In-store Costco purchases have accounted for roughly 21% of total spending on American Express Costco cards over the past year, an analysis of spending by retail category shows. The remaining 79% of card spending is at other merchants.
  • And, while American Express and Costco may not have been satisfied with their relationship, most cardholders express high levels of satisfaction with their Costco cards. Fully two-thirds (66%) of Costco cardholders said in a Lightspeed survey released last month that they are "very satisfied" with their card, ranking the Costco card below only Discover More and Capital One Quicksilver within the cash-back space.

Source: Lightspeed

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