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Costco and Amex end deal

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I bought a 40 y/o bottle of Glenfiddich at Costco with may Amex to celebrate an anniversary with my old partner.

 

Somehow, the idea of using either a Cap One or Discover instead causes a bit of dissonance. Also concern, because I have neither and I'm not about to use a debit card.

 

Looks like a new card is in my future.

That's quite a way to celebrate.

 

Did you find it exponentially better in any way than say a 21 or 30 year bottling?

 

 

My issue with Discover being accepted in place of amex would be purchasing ability. My discover limit wouldn't support a new set of tires. Not too pleased at the thought of using a debit card there.

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I bought a 40 y/o bottle of Glenfiddich at Costco with may Amex to celebrate an anniversary with my old partner.

 

Somehow, the idea of using either a Cap One or Discover instead causes a bit of dissonance. Also concern, because I have neither and I'm not about to use a debit card.

 

Looks like a new card is in my future.

That's quite a way to celebrate.

 

Did you find it exponentially better in any way than say a 21 or 30 year bottling?

 

 

My issue with Discover being accepted in place of amex would be purchasing ability. My discover limit wouldn't support a new set of tires. Not too pleased at the thought of using a debit card there.

 

 

It did have a rather rich flavor but it's like wine. The more you pay for it the better it tastes. :grin:

 

Only time I've ever spent more than a few hundred bucks for Scotch though. It was in part because when he and I started our business we bought an expensive bottle of Champaign intending to celebrate when, and if, we reached 1M in sales. That came and went the bottle was forgotten and probably drunk by parties unknown. So, now that we had retired and gotten together for old times it just seemed like a cool thing to do.

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I think people have read too much into this announcement as of now.

 

1. They said they will be discontinuing their exclusive relationship with Amex. They have never said that they WILL NOT accept Amex as a form of payment. After being Amex only for so long, I do not think it would even be possible for them to just say "On March 31st 2016 we will never again accept Amex."

 

2. Even now, you do not need a Centurion issued Costco Amex to shop at Costco...any Amex card will do. BofA, US Bank, PenFed, USAA etc etc.

 

3. If they do go with Capital One, they are not just going to accept Capital One cards and no other Visa or MasterCards. Capital One will be the sole issuers of their co-branded card. Capital One will give them a better processing rate for the co-branded card, and in return the consumer will get a rebate or something to make the relationship beneficial. Just like you get extra points or miles for using your co-branded cards with other companies. An extra US Air mile for using your US Air card to purchase plane tickets or extra Hilton points when you use your Hilton card to purchase hotel reservations directly from Hilton.

 

4. Whoever they go with, that issuer is going to have to put out a competitive product to the current Amex product. Costco wants you to buy furniture and tires and load up shopping carts like a dump truck and all that crap. Might be a good opportunity for a decent limit Discover card if they go that route.

 

I thought interesting in what I've read on this so far is that the Costco Amex accounted for:

 

10% of US issued Amex cards

8% of US sales for Amex

20% of Amex outstanding US loans (revolving balances)

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I think people have read too much into this announcement as of now.

 

1. They said they will be discontinuing their exclusive relationship with Amex. They have never said that they WILL NOT accept Amex as a form of payment. After being Amex only for so long, I do not think it would even be possible for them to just say "On March 31st 2016 we will never again accept Amex."

 

2. Even now, you do not need a Centurion issued Costco Amex to shop at Costco...any Amex card will do. BofA, US Bank, PenFed, USAA etc etc.

 

3. If they do go with Capital One, they are not just going to accept Capital One cards and no other Visa or MasterCards. Capital One will be the sole issuers of their co-branded card. Capital One will give them a better processing rate for the co-branded card, and in return the consumer will get a rebate or something to make the relationship beneficial. Just like you get extra points or miles for using your co-branded cards with other companies. An extra US Air mile for using your US Air card to purchase plane tickets or extra Hilton points when you use your Hilton card to purchase hotel reservations directly from Hilton.

 

4. Whoever they go with, that issuer is going to have to put out a competitive product to the current Amex product. Costco wants you to buy furniture and tires and load up shopping carts like a dump truck and all that crap. Might be a good opportunity for a decent limit Discover card if they go that route.

 

I thought interesting in what I've read on this so far is that the Costco Amex accounted for:

 

10% of US issued Amex cards

8% of US sales for Amex

20% of Amex outstanding US loans (revolving balances)

 

The numbers may underestimate Amex losses, or at least the losses on the Amex network. They don't include Amex networked cards not issued by Centurion bank.

 

If they do an almost certain deal with another issuer in return for favorable cost reductions they will almost certainly stop accepting all Amex cards. Cap One is the obvious choice for no other reason than that this is what Canada Costco does.

 

Canada's Costco discontinued acceptance of all Amex 12/31/14. Dollars to donuts they will do exactly the same thing here.

 

This is a big chunk out of Amex's revenues. It also explains the Amex layoffs talked in spite of healthy growth. Planning for a smaller future.

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I have some of the Whisky stones and haven't been impressed, the soapstone almost imparts a flavor. It's hard to describe but I've stopped using them.

 

I prefer the ice cube spheres, you get minimal melting and they work great.

 

Johnny Blue at $125 is their coupon price but they seem to run it every couple months. The Laguvlin 16 is my usual pickup these days but I did get a bottle of blue recently.

 

Their 18 and 20 year Kirkland brand is pretty decent too, haven't seen it on the shelf in awhile though. It's aged in Sherry casks so similar flavor to Macallan but at a fraction of the price. The one in Tustin has a bottle of 40 year Kirkland brand for $700.

 

This I really need to try. ^^^

 

I bought a 40 y/o bottle of Glenfiddich at Costco with may Amex to celebrate an anniversary with my old partner.

 

Somehow, the idea of using either a Cap One or Discover instead causes a bit of dissonance. Also concern, because I have neither and I'm not about to use a debit card.

 

Looks like a new card is in my future.

Even a regular bottle of Glenfiddich is good. I can imagine a 40 year.

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If they do an almost certain deal with another issuer in return for favorable cost reductions they will almost certainly stop accepting all Amex cards. Cap One is the obvious choice for no other reason than that this is what Canada Costco does.

 

Canada's Costco discontinued acceptance of all Amex 12/31/14. Dollars to donuts they will do exactly the same thing here.

 

 

 

I recall reading a few months ago about this change for Costco Canada.

 

However, what I recall reading was that Costco Canada switched to MasterCard exclusively, (nothing to do with Cap One). this report suggested that Costco US would follow this path.

 

No way could Costco US have an exclusive deal with Cap one, (MasterCard is a different issue).

 

Just Like Sam's Club Costco is big enough to negotiate an exclusive deal, (try to Use a VISA/AMEX at Sam's tomorrow). :blush2:

 

IMHO smart money suggests only MC is accepted at Costco US Mar 2016, (any issuing bank).

 

As others have said I hope Discover doesn't win the Costco exclusive contract, (and I rather doubt DFS has the horses to pull it off).

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

Edited by cashnocredit

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

Can't disagree with you on this.

 

I wonder if Cap 1 will make their Costco card a Venture card with 2X+ points for Costco spend?

 

Only one thing is certain at this point, Costco's primarily upmarket customer base is going to cost some issuer real money to secure. :wave:

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

Can't disagree with you on this.

 

I wonder if Cap 1 will make their Costco card a Venture card with 2X+ points for Costco spend?

 

Only one thing is certain at this point, Costco's primarily upmarket customer base is going to cost some issuer real money to secure. :wave:

 

 

 

I'm "guessing" they issue something very similar to the Amex offering, being that it was hugely successful and the Costco consumer are already familiar with it.

 

Personally, I could care a less about whatever crappy Cap1 card they are going to issue as I have a wallet full of MasterCards.

 

I want to know what Amex is going to do with my $24K Costco card :) Hopefully something awesome in an attempt to retain the massive customer base!

 

edited to add: The current Amex Costco is pretty crappy overall also, except for its limit and 1995 date.

Edited by Konrad2012

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

Don't forget on the business side, CapOne already has their foot in the door with Amex. I have a Costco Biz cc that is backed by CapOne.

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I think people have read too much into this announcement as of now.

 

1. They said they will be discontinuing their exclusive relationship with Amex. They have never said that they WILL NOT accept Amex as a form of payment. After being Amex only for so long, I do not think it would even be possible for them to just say "On March 31st 2016 we will never again accept Amex."

 

 

Ummm here's the first paragraph of the press release

 

"American Express (NYSE: AXP) announced that its U.S. co-brand and merchant acceptance agreements with Costco Wholesale Corporation (Nasdaq: COST) are set to end on March 31, 2016."

 

Sounds to me like Amex is getting the full heave-ho from Costco.

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I think people have read too much into this announcement as of now.

 

1. They said they will be discontinuing their exclusive relationship with Amex. They have never said that they WILL NOT accept Amex as a form of payment. After being Amex only for so long, I do not think it would even be possible for them to just say "On March 31st 2016 we will never again accept Amex."

 

 

Ummm here's the first paragraph of the press release

 

"American Express (NYSE: AXP) announced that its U.S. co-brand and merchant acceptance agreements with Costco Wholesale Corporation (Nasdaq: COST) are set to end on March 31, 2016."

 

Sounds to me like Amex is getting the full heave-ho from Costco.

 

 

Berkshire is Amex largest investor.

 

Buffet's right hand man has been on the Costco board for 15 years.

 

Oh but to be a fly on the wall.

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Here's the reward scheme for the CapOne Costco card in Canada. It's really awful, except for the 3% back on restaurants.

 

http://www.costco.ca/capital-one-platinum-mastercard.html

http://www.capitalone.ca/credit-cards/costco/

  • 3% on restaurant purchases
  • 2% on gas purchases
  • 0.5% on the first $3,000 you spend annually on all other purchases, and 1% after that
  • Double cash back for first 3 months after activation.

The Canadian TrueEarnings Amex cards turned into the 1.25% everywhere "Simply Cash" cards with a "welcome bonus" for the first 6 months of 5% cash back on eligible purchases in Canada at gas stations, grocery stores and restaurants for the first 6 months (up to $250 cash back).

 

https://www.americanexpress.com/ca/en/content/compare-platinum.html#dialog1

Edited by Shigeru

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Ultimately, Costco has to do what is in the best interest of Costco. They aren't going to dump Amex w/o getting a sweeter deal from their pov which obviously happened. The upside for Cap One is to strengthen their image at the high end (Venture, etc). This is an enormous boost for Cap One but they will make little bucks directly from the Costco franchise. It will be from the branding boost the card will see amongst higher end consumers.

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

 

Can't disagree with you on this.

 

I wonder if Cap 1 will make their Costco card a Venture card with 2X+ points for Costco spend?

 

Only one thing is certain at this point, Costco's primarily upmarket customer base is going to cost some issuer real money to secure. :wave:

Getting 2X + points with my Venture card at Costco would be very sweet indeed. Keeping my fingers crossed for a such a deal.

My Dillards Amex will be heading to the sock drawer or closed in 2016 since it's main use is at Costco. Win-win!

Edited by Losluv

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I partially agree but believe Cap One will be the issuer of Costco branded membership/Mastercards. They will accept MCs generally just like they accept anything on the Amex network today.

 

Fortune: Shares of Capital One and MasterCard were each up roughly 3% on Thursday.

Can't disagree with you on this.

 

I wonder if Cap 1 will make their Costco card a Venture card with 2X+ points for Costco spend?

 

Only one thing is certain at this point, Costco's primarily upmarket customer base is going to cost some issuer real money to secure. :wave:

Getting 2X + points with my Venture card at Costco would be very sweet indeed. Keeping my fingers crossed for a such a deal.

My Dillards Amex will be heading to the sock drawer or closed in 2016 since it's main use is at Costco. Win-win!

 

Hence AXP is down another 3% today.

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I think people have read too much into this announcement as of now.

 

1. They said they will be discontinuing their exclusive relationship with Amex. They have never said that they WILL NOT accept Amex as a form of payment. After being Amex only for so long, I do not think it would even be possible for them to just say "On March 31st 2016 we will never again accept Amex."

 

 

Ummm here's the first paragraph of the press release

 

"American Express (NYSE: AXP) announced that its U.S. co-brand and merchant acceptance agreements with Costco Wholesale Corporation (Nasdaq: COST) are set to end on March 31, 2016."

 

Sounds to me like Amex is getting the full heave-ho from Costco.

 

 

Berkshire is Amex largest investor.

 

Buffet's right hand man has been on the Costco board for 15 years.

 

Oh but to be a fly on the wall.

 

Yes and anyone who sits on a board of directors knows that you have a fiduciary duty to act at all times in the best interest of the corporation upon whose board you sit. You can not let your personal feelings or friendships get in the way of good business! Besides Buffet would never ask a friend to do something unethical. He is one of few honest business men still out there!

Edited by sjca

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It also gives you the potential to get a new Costco card from another issuer and push them to match your previous Amex limit.

 

I don't buy much from Costco, so its really a non-issue for me.

 

I stock up my freezer from them on occasion. I'll get a roasted chicken to shred and freeze. Their aged Gouda cheese is half the price for the same brand. They have a good price on Johnny Walker Blue Label. Get a bunch of eggs and make deviled eggs and egg salad. Their restaurant gift cards can be the smoking deal. There's a place Zovs Bistro that has a couple locations in OC. Costco has gift cards for 25% off. They have one 1/2 mile from my house. It gets me 25% off Chateau Montelena by the glass and happy hour hummus.

CB is amazing!! We even discover things we did not know existed before like .....Chateau Montelena.

 

Whatever it is sounds like a tasty wine. Will look for it next time I visit a restaurant...(when credit improves a bit)

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Yes and anyone who sits on a board of directors knows that you have a fiduciary duty to act at all times in the best interest of the corporation upon whose board you sit. You can not let your personal feelings or friendships get in the way of good business! Besides Buffet would never ask a friend to do something unethical. He is one of few honest business men still out there!

Also, by law a director has to disclose and abstain from voting for any issue in which they have a financial interest, other than the company itself, in it.

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Amex Costco credit holders total is spending at Costoc is 20% of their totalimpending on the card. Amex is betting it will not lose that 80%. The issue with Cap1 is that its core credit card customers were always subprime, no thigh income group such as at Amex. So if it does get the new contract with Costco, it will need to substantially increase current credit limits. All my credit card limits are between $25K to $35K. My QS cap1 card is at measly $12.5k. I use it for $50 once every quarter to keep it on life support. I am unlikely to use cap1 at Costco unless my credit limit is at least $35k, and it would still be less than 10% household income. In my opinion, Costco must not give contract to Cap1. It has the industry worst ability to price risk, Amex is the gold standard there. I think Barcalay's or Chase should get the contract. With lower limits for affluent Costco shoppers, Costco will take the hit.

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It also gives you the potential to get a new Costco card from another issuer and push them to match your previous Amex limit.

 

I don't buy much from Costco, so its really a non-issue for me.

 

I stock up my freezer from them on occasion. I'll get a roasted chicken to shred and freeze. Their aged Gouda cheese is half the price for the same brand. They have a good price on Johnny Walker Blue Label. Get a bunch of eggs and make deviled eggs and egg salad. Their restaurant gift cards can be the smoking deal. There's a place Zovs Bistro that has a couple locations in OC. Costco has gift cards for 25% off. They have one 1/2 mile from my house. It gets me 25% off Chateau Montelena by the glass and happy hour hummus.

 

CB is amazing!! We even discover things we did not know existed before like .....Chateau Montelena.

 

Whatever it is sounds like a tasty wine. Will look for it next time I visit a restaurant...(when credit improves a bit)

What is the connection between what you drink in a restaurant and your credit?

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