Amex Puts a Platinum Price Tag on Signature Luxury Card

The era of the $1,000 annual credit card fee may arrive sooner than you expected. American Express just upped its Platinum card’s yearly price to $895 from $695, making it more expensive than rival travel cards.

American Express justifies the nearly 30% hike with more than $3,500 in benefits, including credits that go toward dining, flights and entertainment. It now has partnerships with Uber, Resy, Oura and Lululemon as travel cards grow increasingly linked to luxurious living beyond vacations.

Split It Three Ways

Amex pioneered the points-based card system that’s the standard for today’s issuers. But rivals are trying to beat Amex at its own game:

• Chase upgraded its premium Reserve card in June, raising its price 45% from $550 to $795, which was briefly more than Amex’s Platinum card (not anymore). It added new perks like status with Southwest, luxury hotel credits and a points-boosting feature that encourages users to book travel on Chase’s own platform. 
• One day after Chase’s announcement, Amex teased its latest update. And a month later, Citibank joined the fight for high spenders’ wallet space by introducing its Strata Elite card for the relative bargain of $595. It includes $1,500 in potential annual rewards (around half of what Amex and Chase promise), which are mostly travel-related.

Card issuers are opting for more premium prices and perks as they chase a more premium consumer. The top 10% of earners made up more than half of second-quarter spending, a three-decade high, Moody’s Analytics found. 

Coupon Cutting: More expensive in the luxury space isn’t necessarily a bad look. Higher prices can make a product feel more exclusive, attracting high spenders while edging out lower spenders overcrowding the lounges. Amex’s premium travel card has historically been the most expensive on the market, and boosting its price above Chase’s could help it maintain that prestige. But a price increase only gets a pass if customers think it’s worth it. Some are downgrading their cards, a Bankrate analyst told CNBC. Others are comparing the bulky benefits to coupon books, since they have to track their spending closely to optimize rewards, and coupons don’t feel very luxe.