After Amex split, Costco inks new credit card deal

NEW YORK - Attention, Costco (COST) shoppers: Starting next year, the discount retailer will accept Visa cards.

Costco said Monday it has struck a deal with financial giant Citi (C) to be the exclusive issuer of its co-branded credit cards, with Visa replacing American Express (AXP) 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 American Express would take effect the next day. The company said it would provide its customers with information about the transition in coming months.

American Express shares fell 6 percent after the split with Costco was announced earlier this month. The relationship with Costco accounted for 8 percent of American Express billed business last year, 20 percent of its worldwide loans and 10 percent of its cards in force. But the stock has since rebounded.

Visa shares were up more than 2 percent, to $271.31, in pre-market trading.

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