Card fee shocks from Chase and Amex could trigger user revolt

The premium credit card market is experiencing unprecedented turmoil as Chase and American Express implement dramatic fee increases that could fundamentally reshape the industry landscape. Chase’s 45% annual fee hike on the Sapphire Reserve to $795 and Amex’s planned Platinum Card refresh suggest a strategic gamble that could either drive customer loyalty or spark a mass exodus to competitors.

The bank on Tuesday unveiled an update to its premium credit card, which will now carry a $795 annual fee. That is a 45% jump from its previous level and the card issuer’s largest price increase for the Sapphire since its 2016 launch. The new rate is a jump from its current $550 annual fee.

The timing couldn’t be more significant. The long-running rivalry between the country’s top premium credit cards is about to heat up again. American Express is following suit with major changes planned for both consumer and business versions of its Platinum Card, though the company hasn’t yet announced specific fee adjustments.

The strategy behind these increases appears calculated. Though Chase is offering some new benefits along with its 45 percent fee hike, its strategy is easy to spot. Industry experts suggest this represents a deliberate attempt to cull customer bases whilst maintaining profitability through higher margins from remaining cardholders.

However, generational divides could determine whether this strategy succeeds or backfires. Davidson says that 76% of Gen Zers and 68% of Millennials surveyed by his firm say that a higher annual fee is worth it for the right levels of rewards. By contrast, only 31% of Gen Xers feel that way, and only 19% of Baby Boomers.

The economic context supporting these fee increases is telling. Sweeter benefits — and higher fees — on travel cards from Chase and Amex reflect a new US economic reality, with the richest households driving half of all consumer spending. This suggests the issuers are betting on affluent consumers’ willingness to pay premium prices for exclusive benefits.

The market dynamics creating these pressures are complex. The card issuers have simply gotten too good at marketing these products. American Express, Chase, and Capital One (which has a similar card, the Venture X) don’t say exactly how many people have lounge-accessing credit cards. This success has led to overcrowding in premium airport lounges and diluted exclusive benefits.

For existing customers, the transitions are being managed carefully. For existing cardmembers, the higher annual fee and most of the benefits only kick in as of October 26, 2025, at the earliest. This gives cardholders time to evaluate whether the enhanced benefits justify the substantial cost increase.

The fee increases are creating significant opportunities for competitors. The industry is seeing what Boyd referred to as a “gravitational pull” toward higher-end, fee-based cards, and the more big premium players like Chase, American Express and Capital One raise annual fees, the more space is created for other entrants between no- or low-fee cards at one end.

Regional banks and smaller issuers are already positioning themselves to capture disaffected premium cardholders. Citizens Bank and other mid-tier issuers see these fee increases as creating a “sweet spot” for cards with moderate annual fees but competitive benefits packages.

The ultimate test will be customer retention rates over the next 12 months. If Chase and Amex successfully retain their core customer bases despite the fee increases, other premium issuers will likely follow suit. However, if significant numbers of customers defect to competitors, it could trigger a broader industry rethink about premium pricing strategies.

The stakes are enormous, with billions in annual fee revenue at risk across the industry.

REFH – newshub finance