Amex Platinum Fee Jumps 29%: Smart Move?

American Express (AXP) increased the annual fee for its flagship Platinum card from $695 to $895, a 29% hike. This is the first increase since 2021, when the fee rose from $550 to $695.

The company refreshed the card's perks, claiming the benefits are worth up to $3,500 if fully utilized. The fee increase applies to new cardholders and renewals.

American Express pioneered the credit card fee model, which now functions like a subscription service. In Q1 2026, 73% of the 3.1 million new cards issued were fee-based, highlighting the company's focus on affluent customers.

The fee hike comes as the top 10% of earners account for nearly half of all spending, according to Moody's data. Amex targets this demographic with premium rewards and exclusivity.

The company will report Q2 earnings on July 24, and investors will watch for the impact of the fee increase on revenue and retention.

Card fees are a critical revenue stream for American Express, providing stable, recurring income independent of consumer spending. In Q1 2026, card fees grew 18% year over year and accounted for over 14% of total revenue.

Since fee income has minimal associated costs, it flows directly to the bottom line, expanding net income. This is especially valuable in a high-inflation, steady-rate environment where loss provisions may need to increase.

The 29% fee hike is expected to add meaningful growth to total revenue this year. Despite the increase, retention rates remained near 100%, indicating strong customer loyalty and pricing power.

Platinum cardholders are highly engaged: spending on Resy (Amex's restaurant app) grew 20% year over year, and lodging spend increased 50%, both outpacing overall U.S. consumer spend. This engagement supports the fee model.

The durable subscription-like revenue stream makes American Express stock compelling, as it reduces earnings volatility and supports long-term growth.