The credit card wars are heating up

On Monday, American Express teased its “largest investment ever in a Card refresh” for its Platinum Card — a credit card that has transcended the simple swipe-and-sign, becoming something of a status symbol for young users willing to shell out $695 a year for travel and dining perks. One day later, JPMorgan Chase announced a revamp of its Sapphire Reserve, its rival lifestyle card, along with a whopping 45% hike in its annual fee to $795.

Chasing hard

The rivalry dates back to 2016, when Chase first launched the Sapphire card at $450, taking aim at Amex’s grip on the high-end market. Around that time, Amex began reversing its decade-long push into the mass market — where it had been launching no-fee cards to attract budget-conscious consumers — and refocused on the premium segment it had carved out as far back as the 1960s.

Since then, the 174-year-old company has leaned hard into its premium pricing: over the past decade, its average fee per card has more than doubled to an all-time high of $103. Cardholders seem unbothered by the expense: Amex added another 13 million new accounts last year, and cards-in-force hit a record 147 million. 

To justify the rising costs, both firms are doubling down on perks. Chase is expanding hotel, dining, and lifestyle credits, as well as launching a high-spend business version. Amex, meanwhile, promised new vague benefits for the coming fall “that will far, far, far exceed the annual fee,” according to its executive.

Of course, lending money to people who can’t wait to spend big on dining and travel comes with risk, and younger consumers — the target for both cards — have the highest credit card delinquency rates of any age group.