As credit card debt continues to rise, American Express and JPMorgan Chase are preparing updates for their luxury credit card offerings.
American Express: Upgrades to its Platinum Card
American Express has long appealed to high-end customers with cards that offer perks like airline and hotel benefits. The flagship Platinum card is set for significant changes later this year, both for consumer and business versions.
According to Howard Grosfield, President of U.S. Consumer Services at Amex, the new benefits will “far, far exceed” the annual fee, though the exact details remain undisclosed as of now.
JPMorgan Chase: Refresh for Sapphire Reserve
Following Amex’s announcements, JPMorgan Chase is also planning improvements to its Sapphire Reserve card. Launched less than a decade ago, it has quickly become a major competitor in the premium credit card market. While the current $550 annual fee may increase, there are speculations of reaching up to $795 once new benefits are introduced.
Given the economic challenges due to inflation and rising interest rates, these potential fee hikes align with strategies by other credit card companies aiming to bolster their loan loss reserves. Credit card issuers are increasingly focusing on premium products for an affluent customer base that tends to be more resilient during downturns and generates higher profits.
Ben Danner from Javelin Strategy & Research noted, “Everyone wants a piece of the pie when it comes to serving the affluent market.” These cards compete with high annual fees but target customers who are willing to pay for significant rewards and experiences. However, many consumers may be deterred from holding both cards due to the substantial annual costs.
Perks and Perceptions
Premium credit cards continue to attract customers seeking the associated benefits, despite the high fees. These perks allow issuers to build relationships with affluent clients and reshape their market perceptions. Amex might introduce new statement credit partnerships, such as potentially switching from Walmart+. Similarly, Chase could enhance travel perks and expand reward verticals beyond just travel.
