American Express’s decision to hike the annual fee for its Platinum card, and maintain strong customer retention, may signal a broader shift in the credit card industry. This could see rival companies following suit, potentially impacting consumers.
The business world often sees market leaders setting the pace for pricing. When a company like Costco raises membership fees without losing customers, it often opens the door for competitors to do the same. Warren Buffett famously highlighted the importance of "pricing power," noting that the ability to raise prices without losing business is a sign of a strong company.
This dynamic also plays out in the telecommunications sector. T-Mobile’s move to eliminate contracts forced AT&T and Verizon to adapt. Similarly, in the credit card market, moves by companies like Chase and American Express often trigger reactions from competitors like Citi and Bank of America.
In late 2025, American Express increased the annual fee for its Platinum card from $695 to $895. To justify the increase, the company highlighted over $3,500 in annual lifestyle benefits, including credits for Resy, lululemon, and Uber One memberships.
Howard Grosfield, Group President of US Consumer Services at American Express, defended the price increase, stating that the company aimed to deliver benefits "far, far in excess" of the $895 fee. The annual fee for the Platinum card was $550 just five years ago, marking a significant increase.
During the company’s first-quarter earnings call, CFO Christophe Le Caillec noted that approximately one-quarter of US consumer Platinum cardholders had been billed at the higher rate, with no change to retention rates. CEO Stephen Squeri added that revenue from Platinum cardholders grew by 6% in Q1, primarily from existing card members.
Gary Leff of View From the Wing pointed out that annual fees are becoming a material part of credit card companies’ revenue. He noted that while the best cards return revenue generated from spending to the customer, the flat fee is growing, and consumers are paying it.
Changing attitudes toward fees have also played a role. Analysts suggest that younger generations are more comfortable paying credit card fees, viewing them as subscription-like products that deliver value through travel, dining, and entertainment experiences.
While American Express has been at the forefront of recent fee hikes, Chase actually set a precedent by increasing the fee for its Sapphire Reserve card to $795 per year, up from $550. This trend extends beyond credit cards, with airlines like Delta and JetBlue also targeting higher-spending consumers with increased perks.
Ultimately, American Express’s Platinum fee increase reflects a broader shift towards premium, high-fee credit cards. Added perks are being used to justify pricing and potentially set a new benchmark for competitors targeting affluent customers.
| Feature | American Express Platinum | Chase Sapphire Reserve |
|---|---|---|
| Annual Fee | $895 | $795 |
| Key Benefits | Travel credits, lounge access, | Travel and dining rewards, |
| lifestyle perks | premium travel benefits | |
| Target Customer | Affluent travellers, luxury | Frequent travellers, |
| spenders | dining enthusiasts |
