On Jan. 1, American Express will become Hilton's exclusive
issuer for Hilton Honors co-branded credit cards in the U.S. Hilton has offered
Amex co-branded cards since 1995 and Citi co-branded cards since 2000. The deal
is for a multi-year partnership, and a Hilton spokesperson said Hilton Honors members
number 63 million. More information on the impact on U.S. co-branded Citi cardholders
will follow later this year, but for now, they will continue to earn points
from purchases.
Amex's loss of the Costco co-brand portfolio in June 2016 to
Citi has continued to affect the card network. Net income for Global Commercial
Services, the division that houses corporate cards, decreased 14 percent in the
first
quarter, which Amex attributed to the loss of Costco. The card network also
blamed the Costco loss for the drop in its average discount rate of 1
percentage point.
Following
Marriott International's acquisition of Starwood Hotels and Resorts, Amex is
awaiting Marriott's decision on whether to renew Starwood's co-branded Amex card
program, which expires in 2020. Marriott's Visa co-branded card program with
JPMorgan Chase expires in 2018. If Marriott terminates Starwood's relationship
with Amex, the card network will lose its second
largest co-branded partnership after Delta, worth 2 percent of Amex's 2015
billed business and 4 percent of 2015 loans.