Amex’s Platinum overhaul intensifies the credit card perk wars
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What does it mean that only a fraction of the country’s population — its wealthiest consumers — are propping up spending growth, while the vast majority of people are barely shelling out enough to keep pace with inflation?
One answer to that question, on a grand scale, is that the US economy is largely powered by the well-to-do. Wall Street can thank the spending whimsies of the affluent for being the bulwark between our current economy and a recession.
Another zoomed-in answer: We now have luxury credit cards that cost close to $1,000 just to hold.
On Thursday, Amex unveiled its revamped Platinum credit card, offering expanded travel and dining benefits to more easily digest the $200 fee hike, bringing the annual cost to $895.
The credit card perk wars are once again upon us. And so are the striking dichotomies that define the US economy. We have all-time highs in the stock market alongside rising unemployment and a “limited-edition mirror card design” to contrast with research showing consumers in the top 10% of the income distribution account for nearly half of all spending.
You can be sure the new card makes a big clang when it hits the table.
But for the credit card companies locked in an arms race of luxury amenities, the value proposition still isn’t that complicated. Deep-pocketed customers and businesses charge tens or hundreds of thousands of dollars on their cards, generating swipe fees. The most intrepid and diligent card-holders exercising every reward can wring $3,500 of value from their Platinums, but Amex still makes money from the higher annual fee from those who don’t seize all the benefits.
Read more: Amex Platinum vs. Chase Sapphire Reserve: Elite travel cards with competing perks
The update is the Platinum card’s most meaningful refresh since 2021. Compared to the latest parade of perks, Amex was only just beginning to stack its premium rewards card with lifestyle and travel-related benefits. And the enhancement comes three months after rival JPMorgan Chase announced an overhaul of its own luxury card, the Chase Sapphire Reserve, revamping its features and benefits and upping its annual fee to $795.
Is this sustainable?
It’s tempting to say that for people chasing a kind of ostentatious status symbol, the math will eventually catch up to them. But that’s true for any kind of reckless spending, regardless of the metallic (or plastic) finish of their card of choice. Borrowing is set to get cheaper, though, as the Fed shifts gears and enacts looser monetary policy with more rate cuts on the way.
