American Express said today that it has agreed to sell its Costco U.S. co-branded credit card portfolio to Citibank (Citi).
The sale is expected to close June 2016. At that time, holders of Costco American Express Cards will have their co-branded accounts transferred to Citi. Additional details will be provided to Costco AmEx card members in advance of the partnership end date.
Last February, American Express announced the end of the exclusive co-branding agreement because it could not agree to a new deal that made better economic sense. The end of the deal was slated for this March.
For more than ten years, shoppers could only use American Express credit cards at Costco.
AmEx said today it stands to make $1 billion in its deal with Citi.
“The ultimate gain on sale will be determined based on the assets actually sold, and as previously disclosed, American Express estimates a gain of approximately $1 billion,” American Express said. “Given that the close is still several months away, and the Card Member borrowing and paydown trends are difficult to predict in this type of transition, the final gain could differ from the estimate.”
Costco provides an FAQ page for their co-branded card holders. The main thing to know: “You may continue to carry a balance and will not be required to pay your balance in full to American Express as a result of the end of the partnership,” Costco says.