If you are like many Americans, you do most of your shopping at Costco, and you may only be holding a lower level Amex card in order to get travel and rewards points on your shopping at Costco. That is because, per an agreement that has been in place for over a decade, Costco today only takes cash and Amex cards. That is changing in April, when Costco will no longer be accepting Amex at all. In announcing their failure to renew the Costco agreement, American Express CEO Kenneth Chenault said, "We were unable to reach terms that would have made economic sense for our company and shareholders."
Costco already has replaced their exclusive Amex partnership in Canada with one with Capital One. In the US, it is more likely that Costco will partner directly with Visa or Mastercard from April 2016 onwards.
Under any circumstance, the failure of Costco and Amex to renew their relationship may prompt Costco-shopping Americans to revisit their own relationship with Amex. The travel and rewards points that you are earning on an Amex card may be increasingly less valuable than the points that you could earn somewhere else, depending on how and where you are redeeming them. In the hotel space for example, Starwood points earned through Amex's Starwood card are valuable, but BestCashCow's hotel point survey shows that Hyatt points (earned through Chase) and Club Carlson points (earned through US Bank) are more valuable. Likewise, BestCashCow's airline points survey shows that Delta miles earned through Amex have become substantially less valuable than United miles (earned through Chase) and American miles (earned through Citibank). Transferring Amex Membership Rewards points to British Airways, however, continues to be a good option, especially during those periods where Amex allows members to transfer them at as high as a 1 Membership rewards to 1.40 Avios ratio.
I, like many, have largely moved my personal Amex spend to Chase in order to accumulate the more valuable United and Hyatt points (Chase also offers British Airways as a transfer partner, but only at a 1:1 ratio). While I still enjoy the benefits of the Amex Platinum card for my business spend and will not be reconsidering that card, the Costco - Amex chasm will cause me to cancel my personal Amex cards when they come up for renewal.