What's happened
American Express reports strong early demand for its revamped Platinum card, with new account acquisitions doubling pre-refresh levels. The company’s third-quarter earnings show increased spending, stable retention, and a higher annual fee of $895, amid fierce competition in the premium credit card market.
What's behind the headline?
The early success of Amex’s Platinum refresh indicates a strategic shift to target younger, affluent consumers who value wellness and entertainment perks. The doubling of new account acquisitions suggests that the market remains receptive to premium cards despite rising fees. This trend underscores a broader industry pattern where issuers are willing to accept higher costs to attract high-spending, loyal customers. The stable retention rates imply that existing cardholders are not deterred by the fee increase, which could signal a sustained demand for luxury credit products. However, the aggressive marketing and product upgrades also risk intensifying the 'luxury credit card wars,' potentially leading to further fee hikes and perks escalation. If this trend continues, it may reshape the premium credit card landscape, favoring issuers with innovative offerings and strong brand loyalty. For consumers, this means more tailored rewards but also higher costs, making it crucial to evaluate whether the added benefits justify the expense.
What the papers say
The story is supported by reports from Business Insider UK, which highlights the strong demand and early success of Amex’s Platinum card refresh, noting that new account acquisitions are at twice the pre-refresh level. AP News provides context on the company's financial performance, reporting a 16% increase in quarterly profit and a revenue of $2.9 billion, driven by increased spending and higher card balances. Bloomberg confirms the overall billed business volume of $421 billion, surpassing analyst expectations of $415.2 billion, indicating robust transaction activity. While these sources focus on financial metrics and market performance, Business Insider UK emphasizes consumer response and product strategy, illustrating a comprehensive picture of Amex’s current positioning in the competitive premium credit card market.
How we got here
American Express refreshed its flagship Platinum card in September, increasing its annual fee to $895 and enhancing perks to attract younger consumers, especially Millennials and Gen Z. This move comes amid intense competition from JPMorgan Chase and Citigroup, who also launched or upgraded premium cards. The market for high-net-worth credit cards has become highly competitive, prompting issuers to innovate and raise fees to maintain growth.
Go deeper
More on these topics