Near-premium credit cards draw younger consumers as top fees reach $895

Amex says Gold cardholders average 29; Platinum holders 33

A reshuffling of the U.S. credit-card market is creating a new “near-premium” tier between no-fee cards and ultra-premium products as American Express and Chase have pushed their top annual fees toward $900. Card issuers, including airlines and banks, are introducing products in the $325-to-$395 range for consumers priced out of the Platinum and Sapphire Reserve cards.

It used to be that $500 would get you a premium credit card. Now it gets you something just below that.

American Express raised the Platinum card’s annual fee by $200 to $895 last year, and Chase lifted the Sapphire Reserve from $550 to $795. The higher prices are pushing some consumers to seek alternatives.

For consumers weighing the top tier, the math has changed. Skye Zhao, a 25-year-old doctoral student in New York, said she could not justify paying $895 for a Platinum card but determined the $325 annual fee on the Amex Gold would be worth the travel points she could earn. The card’s rose-gold metal design is “very pretty,” Zhao said.

American Express redesigned the Gold card in recent years to appeal to younger consumers, who prioritize dining and takeout, the company said. The card’s most recent refresh of perks added credits at Dunkin’ and Five Guys. The average age of a Gold cardholder is 29, the company said, compared with 33 for the Platinum. Christophe Le Caillec, Amex’s chief financial officer, told an industry conference last week that the Gold card is “like the favorite product” of Gen Z. Younger cardholders broadly have been a key driver of revenue growth, he said, including urban professionals who are “quite comfortable paying a card fee.” “Cracking that nut and having American Express being relevant to this very large and growing population was a major breakthrough for us,” Le Caillec said.

“What has emerged is what I would call the upper-middle-class option,” said Ted Rossman, principal consumer finance analyst at Money Management International, a credit-counseling organization. Rossman cautioned that near-premium card perks often do not justify the fees and may offer only marginal upgrades over cheaper cards. In many cases, he said, consumers may get better value from no-fee or lower-fee options.

Airlines have also moved into the tier, seeking customer loyalty and revenue from issuing banks. Alaska Airlines last year launched its Atmos Rewards Summit card at $395 after merging its rewards program with that of Hawaiian Airlines — in part because the carrier said it was late to the premium game. “Most consumers aren’t going to have two $800, $900 credit cards,” said Brett Catlin, Alaska’s senior vice president of network, partnerships and loyalty. American Airlines and Citi launched a card last year priced at $350, and Southwest Airlines and Chase said they plan to introduce a higher-end card next year. Southwest has not announced the fee; its current consumer cards range from $99 to $229.

Capital One said its Venture X card, introduced in 2021, was designed to appeal to a consumer who wants access to some premium experiences but also prizes value. “It’s a consumer who’s doing that mental math,” said Lia Dean, the company’s president of banking and premium products. “But when they plan that trip and when they take that trip they want to stay at a nicer hotel, they want some enhanced experiences along the way.” Katie Suiters, a 38-year-old media trainer in McLean, Va., upgraded to the Venture X after noticing more Capital One lounges at airports. The lounges offer unlimited tapas, cold bar, hot bar and to-go items along with food by chef José Andrés, she said. Suiters visited at least 10 times this summer and called the $395 annual fee “1,000% worth it.”