NEW YORK—American Express has delivered a blow to Citigroup, winning exclusive rights to issue credit cards for Hilton Worldwide Holdings, ending an agreement in which the two issuers shared the business.
The new arrangement takes effect Jan. 1, Bloomberg reported.
Bloomberg noted that the Amex move comes on the heels of Marriott International Inc.'s takeover of rival Starwood Hotels & Resorts Worldwide, placing Amex's Starwood Preferred Guest card, which accounts for about 4% of the company's loans and 2% of total spending, at risk.
Marriott has a co-brand deal with Chase and Visa.
“Amex winning the Hilton portfolio takes some of the sting out of losing its partnership with Costco, a much bigger partnership that accounted for 20% of worldwide loans and 8% of card spending,” Bloomberg noted.
As CUToday.info reported, Costco decided in 2015 to end its 16-year relationship with Amex after the firms couldn't agree on card fees. Last year, Citigroup became the exclusive credit card issuer for the retailer.
Citigroup said the terms of the Hilton deal didn't make economic sense for a relatively small portfolio. Hilton represents about 1% of the bank's $126.4 billion U.S. credit card loans, Bloomberg explained.