Updating Benefits for Affluent Customers

American Express is enhancing the perks offered on its premier card while increasing the annual fee to $895, a significant increase from the previous $695. According to Amex, this move is justified by the expanded partnerships and benefits now included.

The new benefits include credits at Uber, Lululemon, Oura, and Resy, as well as travel and dining rewards familiar to Amex cardholders. Streaming benefits have also been added.

Ben Danner, a Senior Credit and Commercial Analyst at Javelin Strategy & Research, comments that while the new fee is substantial, it brings an earning potential of $3,500, aligning with Amex’s strategy to offer statement credits with select brands.

Danner notes, however, that if these brand-specific credits do not resonate well with consumers, the card’s value could diminish quickly. General travel and dining credits might have broader appeal compared to targeted brand promotions.

Competing for Affluent Customers

The Platinum card update was announced earlier this year, around the same time that JPMorgan Chase revealed changes to its Chase Sapphire Reserve card. In a similar move, Citi launched its Strata Elite card, designed to compete in the luxury market, with an annual fee of $595.

Raised fees and stricter lending criteria are aimed at targeting affluent customers, who are perceived as more reliable spenders. This group’s spending power contributes to Amex’s expansion of merchant acceptance over the years.

A Premium for Stability

This focus on high-end customers is also driven by macroeconomic uncertainty. Rising inflation and interest rates have increased consumer credit card debt, making stability a valuable attribute. The recent merger between Capital One and Discover has intensified competitive pressure, pushing issuers to strengthen their customer bases.