Costco: What Losing a Partner Looks LikeThin moat

American Express (AXP) — moat facet

The Costco exit took a fifth of American Express's loans, and Delta is now a larger partner than Costco ever was.

American Express has lost a major partner before, and the filings from that time are the best guide to what a loss costs. In February 2015 it announced that its cobrand and acceptance agreements with Costco in the United States were set to end in 20161. It said it was "unable in the end to reach terms that would have made economic sense"2.

Largest cobrand as a share of Amex (%)19%Costco loans 201521%Delta loans 20258%Costco billedbusiness 201513%Delta billed business 2025American Express Forms 10-K FY2015 and FY2025
Delta is larger now than Costco was then.

The numbers were large. At the end of 2015 Costco cobrand accounts were responsible for about 19% of worldwide Card Member loans and about 10% of total cards-in-force, and generated about 8% of worldwide billed business3. About 70% of the spending on those cards happened outside Costco's warehouses4.

Amex received something on the way out. It booked a $1.1 billion gain, $677 million after tax, on the sale of the Costco card loans and receivables in the second quarter of 20165. The same year it booked $410 million of net restructuring charges6, and it later faced a securities class action over how it had disclosed Costco's importance7.

The lesson has two parts. The first is that Amex will walk away from a partner whose terms it considers uneconomic, which is discipline worth something. The second is that a partner representing a fifth of the loan book can leave, and did.

This app's Costco page, Visa Is the Only Credit Card That Works, covers the event from Costco's side: a sixteen-year exclusive ended and Visa replaced Amex as the only credit card network accepted.

The same filing that announced the loss described how far it reached. Besides the cobrand cards, 1% of worldwide billed business in 2015 came from other Amex cards used at Costco warehouses8, spending that also ended when Costco stopped accepting the card in the United States.

The comparison with today is the reason this page exists. Delta alone is now about 13% of billed business and 21% of loans9, more than Costco was on both counts. The size of any partner relative to the Costco precedent is the figure to watch; a Delta renewal on terms that raised the loan share further would make the next negotiation larger than the one Amex lost in 2015.

Moat trajectory: Narrowing

Costco 8% of billed business and 19% of loans in 2015; Delta 13% and 21% in 2025.

The number that tests this moat
Reported
Delta share of Card Member loans
About 21% (2025), against Costco's 19% in 2015

The size of the largest partner relative to the last one Amex lost; above the Costco level on both counts already.

Source: American Express Form 10-K, FY2025 ↗
References
  1. ReportedIn February 2015 it announced that its cobrand and acceptance agreements with Costco in the United States were set to end in 2016.
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  2. ReportedIt said it was "unable in the end to reach terms that would have made economic sense".
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  3. ReportedAt the end of 2015 Costco cobrand accounts were responsible for about 19% of worldwide Card Member loans and about 10% of total cards-in-force, and generated about 8% of worldwide billed business.
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  4. ReportedAbout 70% of the spending on those cards happened outside Costco's warehouses.
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  5. ReportedIt booked a $1.1 billion gain, $677 million after tax, on the sale of the Costco card loans and receivables in the second quarter of 2016.
    American Express Form 10-K for fiscal 2016 - the gain on the sale of the Costco cobrand portfolio and average discount rates. — FY2016 · publ. February 2017 · source ↗
  6. ReportedThe same year it booked $410 million of net restructuring charges, and it later faced a securities class action over how it had disclosed Costco's importance.
    American Express Form 10-K for fiscal 2016 - the gain on the sale of the Costco cobrand portfolio and average discount rates. — FY2016 · publ. February 2017 · source ↗
  7. ReportedThe same year it booked $410 million of net restructuring charges, and it later faced a securities class action over how it had disclosed Costco's importance.
    American Express Form 10-K for fiscal 2016 - the gain on the sale of the Costco cobrand portfolio and average discount rates. — FY2016 · publ. February 2017 · source ↗
  8. ReportedBesides the cobrand cards, 1% of worldwide billed business in 2015 came from other Amex cards used at Costco warehouses, spending that also ended when Costco stopped accepting the card in the United States.
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  9. ReportedDelta alone is now about 13% of billed business and 21% of loans, more than Costco was on both counts.
    American Express Form 10-K for fiscal 2025 - Delta, cobrand partners and partnership concentration. — FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 28, 2026