Key takeout

• American Express recently revealed that significant changes for the US consumer and business Platinum Card will be unveiled “late this year,” with an annual fee set at $695.
• These updates were hinted at earlier this summer, especially in light of the competition from Chase Sapphire Reserve, a key contender in the premium credit card arena.
• A study of 2,000 US bank customers indicated that among those with premium cards costing at least $250 yearly, 33% favored cashback, while 52% preferred card points.

It seems likely that annual fees for premium credit cards won’t remain static for long.

American Express (AXP) has announced that a “major update” is coming “late this year.” This applies to both the consumer and business versions of the highly sought-after Platinum Card, which carries a hefty $695 fee.

They aim to elevate not only travel and lifestyle benefits but also to adapt to changing customer preferences about what makes a card worthwhile.

This announcement comes alongside anticipated changes from Chase Sapphire Reserve, another strong competitor in the premium card space. The annual fee for Sapphire Reserve is $550, and there’s speculation among industry bloggers that tighter competition will lead to increased fees across the board.

Consumers with premium cards prefer points over cashback

A recent survey from Bank of America, which involved 2,000 participants, revealed that 70% consider cashback the top benefit a credit card can provide. However, among users holding premium cards—defined as those with an annual fee of $250 or more—only 33% valued cashback highly, while a more significant 52% rated card points more favorably.

Those investing heavily in premium cards often reap substantial initial bonuses. For instance, the personal version of the American Express Platinum Card offers up to 175,000 membership reward points for spending $8,000 within the first six months, and the business card can deliver as much as 250,000 points for eligible purchases totaling $20,000 in three months. In contrast, the Chase Sapphire Reserve offers a welcome bonus of 60,000 ultimate reward points, which requires $5,000 spent in the initial three months.