In recent years, we’ve gotten very comfortable with earnings reports from American Express, which leans on its affluent cardmembers to deliver growth. But a lesser-discussed driver behind Amex’s consistent performance is the rising cost of carrying its heavy metal cards around.
- CEO Stephen Squeri says Amex has raised card fees by an average of 17% per year; in its latest quarter, fee revenue jumped 20% year-over-year.
- That’s even before Amex ups the annual fee on its priciest product, the Amex Platinum Card ($695/yr), a move widely anticipated to take place in Fall 2025.
Only game in town: Amex is assuming churn — which has stayed low despite rising fees — will remain low, especially if it keeps offering more and more value to customers. Chase seems to be forking this model, revamping its premium card lineup in a similar direction.
The trade-off: Some card issuers are positioning for the possibility that cardmembers might not be up for an $800+ annual fee (or worse). Banks like Citizens have remarked on the opportunity in the market, and taking a page from Capital One’s Venture X playbook ($395/yr, easy-to-use credits), Citi is launching its Strata Elite Card this weekend ($595/yr) to take on the old guard.
